Hedge Fund Data
Hedge fund industry performance review – May 2025
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In summary
Hedge fund performance was positive in May. The average asset-weighted hedge fund net return across all strategies was 1.62%. The strongest performing master strategy was long biased, followed by event and equity long/short. The weakest strategy was quant, which nonetheless generated a small positive return. Hedge fund performance dispersion was similar to that in April.
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Aurum’s portfolios are designed to grow and protect clients’ capital, while providing consistent uncorrelated returns. With 30 years of hedge fund investment experience, Aurum’s objective is to lower the barriers to entry enabling investors to access the world’s best hedge funds.
Aurum conducts extensive research and analysis on hedge funds and hedge fund industry trends. This research paper is designed to provide data and insights with the objective of helping investors to better understand hedge funds and their benefits.
| HEDGE FUNDS | ||
|---|---|---|
| Hedge fund composite |  | Hedge fund performance was positive in May. The average asset-weighted hedge fund net return across all strategies was 1.62%. The strongest performing master strategy was long biased, followed by event and equity long/short. The weakest strategy was quant, which nonetheless generated a small positive return. Hedge fund performance dispersion was similar to that in April. |
| Long-biased | | Long biased funds posted the strongest performance among master strategies, returning 3.68% on average. Equity-focused sub-strategies led gains, supported by a robust rally in global equities. Other sub-strategy returns were more muted, but all were positive. |
| Quant | | Quant funds returned 0.17% on average in May. Sub-strategy performance was generally positive, but CTAs continued their recent run of weaker performance; quant macro/GAA strategies also had negative returns, but to a lesser extent. |
| Equity long/short | | Equity long/short funds returned 2.53% on average in May. All sub-strategies generated performance, ranging from sector focused funds, up 1.65% to global long/short funds, up 3.12%. |
| Macro | | Macro funds returned 0.71% on average in May. All sub-strategies had positive performance, however macro emerging markets were the strongest, up 1.26%, supported by policy-driven currency and rate moves in Asia and Latin America. |
| Multi-strategy | | Multi-strategy funds returned 1.16% on average in May. All AUM groups posted positive returns, with the strongest performance from small to mid-sized funds ($0.5-1bn), which were up 3.84%. The largest funds (>$5bn) returned 1.12%, while the smallest (<$0.5bn) were modestly positive at 0.81%. |
| MARKETS | ||
|---|---|---|
| Major events | Markets were buoyed in May by a US-China agreement to reduce tariffs, bolstering risk sentiment globally. However, investor optimism was tempered mid-month by Moody’s downgrade of the US credit rating and uncertainty surrounding the Trump administration’s proposed US tax bill. The geopolitical backdrop remained tense, with new trade threats and sanctions contributing to market volatility. | |
| Equities | | Equities rallied across major regions, supported by easing trade tensions and cooling inflation data. US growth stocks outperformed value, with tech leading gains. European and UK markets followed suit, while Chinese and South Korean equities rose on domestic stimulus and trade optimism. |
| Government bonds |  | US Treasury yields rose amid debt concerns and the Moody’s downgrade, reversing early-month gains. European bond yields were little changed overall, while UK gilts and Japanese government bonds saw notable yield increases following central bank decisions and fiscal uncertainty. |
| Corporate bonds | | US non-investment grade credit outperformed, lifted by risk-on sentiment post-US-China trade deal. Investment-grade US credit indices ranged from slightly negative to flat, with intra-month volatility around Fed policy and tax proposals. EM credit posted gains, helped by US dollar weakness and improving sentiment. |
| Currencies | The US dollar ended the month marginally weaker, losing gains after Moody’s downgrade. Sterling and the Australian dollar rose on central bank rate cuts. EM currencies broadly appreciated, notably the Korean won and Mexican peso, amid supportive local policies and improved trade outlooks. | |
| Commodities | | Oil prices rose following the US-China tariff deal but fell back on Iran deal speculation. Precious metals were mixed, with gold down slightly. Base metals edged higher. There was mixed performance in agricultural commodities; cocoa prices spiked, and coffee underperformed on higher supply forecasts. |
The Hedge Fund Data Engine is a proprietary database maintained by Aurum Research Limited (“ARL”). For information on index methodology, weighting and composition please refer to https://www.aurum.com/aurum-strategy-engine/. For definitions on how the Strategies and Sub-Strategies are defined please refer to https://www.aurum.com/hedge-fund-strategy-definitions/
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