Opalesque Trade Replace – Occasion Pushed, Equity Hedge and Cryptocurrency strategies led efficiency gains amongst hedge funds in May, as reported by HFR. The HFRI posted sturdy gains for the month as the worldwide fairness market restoration from late April prolonged by means of May,
pushed by progress on commerce negotiations and an enhancing financial outlook for 2H25.
As implied volatility declined from the historic April surge, the HFRI Event-Driven (Whole) Index led technique efficiency, leaping +3.8 %, the strongest month-to-month achieve
since December 2023. Equally, the HFRI Equity Hedge (Whole) Index superior +3.7 % for the month, additionally the strongest month-to-month achieve since Dec 2023. The broad-based HFRI Fund Weighted
Composite Index (FWC) gained +2.0 % for the month.
The HFR Cryptocurrency Index accelerated its sharp restoration from 1Q 2025 declines, vaulting +12.7 % in May, whereas the brand new sub-strategy HFR Cryptocurrency-
Basic Index surged +24.7 % for the month. As just lately introduced, HFR launched 11 modern, refined and specialised sub-strategies targeted on the Cryptocurrency and
Blockchain house.
The HFRI Multi-Supervisor/Pod Store Index added +1.0 % in May, with highly effective contributions from fairness, event-driven, cryptocurrency and fastened earnings exposures.
Hedge fund efficiency dispersion contracted in May, as the highest decile of the HFRI FWC constituents superior by a mean of +10.6 %, whereas the underside decile fell
by a mean of -4.6 %, representing a prime/backside dispersion of 15.2 % for the month. By comparability, the highest/backside efficiency dispersion in April was 17.0 %. Within the
trailing 12 months ending May 2025, the highest decile of FWC constituents gained +31.1 %, whereas the underside decile declined -25.3 %, representing a prime/backside dispersion of 56.4
%. Roughly seventy % (70%) of hedge funds produced optimistic efficiency in May.
The HFRI Lengthy Volatility Index, first revealed by HFR in April and which incorporates lengthy volatility and tail danger strategies, fell -2.5 % in May as volatility declined; this after
gaining +4.7 % in April. The Index is the business’s main benchmark for pure lengthy volatility and tail danger strategies, which has shortly turn into a core space of focus for institutional buyers.
Final month, HFR hosted an investor occasion in Boston for the index launch; a recap and spotlight movies of the occasion shows and panel dialogue is on the market right here.
Event-Driven (ED) strategies, which frequently concentrate on out-of-favor, deep worth fairness exposures and hypothesis on M&A conditions, led technique efficiency in May with the
HFRI Event-Driven (Whole) Index surging an estimated +3.8 % for the month, the strongest month-to-month achieve since December 2023. ED sub-strategy efficiency was led by the HFRI ED: Particular
Conditions Index, which surged +6.0 %, and the HFRI ED: Activist Index, which jumped +4.35 % for the month.
Equity Hedge (EH) funds, which make investments lengthy and brief throughout specialised sub-strategies, additionally posted a powerful achieve in May, led by gains in Know-how, Basic and
Quantitative strategies. The HFRI Equity Hedge (Whole) Index superior an estimated +3.7 % for the month, the strongest achieve since December 2023, led by the HFRI EH: Know-how Index,
which surged +6.0 %, and the HFRI EH: Basic Development, which jumped +4.7 %. The HFRI EH: Basic Worth Index superior an estimated +4.2 %, and the HFRI EH:
Quantitative Directional Index gained +3.9 % in May.
Fastened income-based, curiosity rate-sensitive strategies additionally gained for the month regardless of a pointy improve in rates of interest related to pending tax and spending
laws, with the HFRI Relative Worth (Whole) Index advancing an estimated +0.9 % in May. RV efficiency was pushed by the HFRI RV: FI Company Index, which gained +1.3 % for
the month, and the HFRI RV: Multi-Technique Index, which added +1.2 %.
Uncorrelated Macro strategies declined for the second consecutive month, because the HFRI Macro (Whole) Index fell -1.0 %, although technique efficiency was combined throughout
commodity and quantitative, trend-following strategies, in addition to elementary, discretionary exposures. The HFRI Macro: Systematic Diversified Index declined -1.8 %, whereas the HFRI
Macro: Forex Index and HFRI Macro: Discretionary Thematic Index every superior +0.2 % in May.
Liquid Various UCITS strategies additionally superior for the month, because the HFRX Market Directional Index surged +3.06 %, and the HFRX International Hedge Fund Index gained
+1.17 % in May. HFRX technique efficiency was led by the HFRX Equity Hedge Index, which gained +2.63 % for the month.
“Hedge funds posted sturdy gains in May, led by Directional and cryptocurrency strategies, as volatility subsided from the April spike and know-how equities led international gains
on progress in tariff negotiations and improved international financial outlook for 2H25. Opportunistic positioning shortly transitioned from defensive portfolio safety to focused and
concentrated exposures positioned for fairness market enchancment and restoration,” acknowledged Kenneth J. Heinz, President of HFR. “Whereas general geopolitical and inflation dangers have fallen from 2024
ranges, these dangers have additionally advanced and shifted to incorporate legislative uncertainty, pressure over US authorities spending/borrowing, and uncertainty relating to continued efforts to resolve
ongoing and potential army conflicts. Regardless of latest gains, funds remained tactically positioned for fluid, speedy adjustments to the monetary market cycle. As such, institutional buyers
within the opportunistic publicity to those quickly evolving dangers and alternatives are more likely to improve allocations to funds which have demonstrated their technique’s robustness by means of latest
volatility, accelerating business progress in 2H25.”
