By Nell Mackenzie and Summer Zhen
LONDON/HONG KONG (Reuters) -Hedge funds made gains in May on a weaker dollar and by exploiting market dislocations following April’s global trade shock but faced losses in whipsawed commodities and fixed income markets, according to sources and bank research.
Stocks bounced back last month as tariff worries ebbed while bond markets sold off as worries about high debt levels in big economies such as the United States and Japan resurfaced.
Hedge funds globally returned a positive monthly return of 3% as of May 29, a JPMorgan prime brokerage note sent to clients on Friday and seen by Reuters on Monday showed. Industry returns were up 5% for the year so far, the note said.
Stock picking hedge funds posted a 3% performance in May, while multi-strategy hedge funds trading many different strategies under one roof returned 2.5% and quantitative equity funds using systematic strategies returned 4.2%, the note said.
Singapore’s $1.1 billion multi-strategy hedge fund Arrowpoint Investment Partners benefited from exploiting markets roiled by tariff shocks and sees more arbitrage opportunities ahead, its chief investment officer told Reuters.
Billionaire investor Cliff Asness’s $135 billion hedge fund AQR Capital Management saw gains from stock selection and corporate arbitrage in its Apex Strategy, which returned a 2.4% May return net of fees, said a source.
Systematic and trend following programmes that traded in stock markets were helped by their stock holdings.
AQR’s Helix Strategy, which follows market trends, was flat in May but has delivered a 7% return for 2025 through the end of May, as positive returns from stocks were offset by reversals across interest rate derivatives and trades which play differences across different bond tenors, said the source.
London-listed Man Group’s AHL Alpha fund returned a negative 2.19% for May and is down around 11% while its multi-strat fund had a positive May and has returned around 5% so far this year, said the fund’s website.
Systematic funds, which have limits on how much volatility their fund can tolerate have in recent months had to ditch trades, both losing and winning, even when the uncertainty roiling markets has been temporary, said an article written by portfolio managers at Man Group’s AHL strategy in April.
Fund/Hedge fund May return YTD return
Millennium Management 1.7% 0.4%
Dymon Asia Capital 3.3% 8%
Arrowpoint Investment Partners ~3%
AQR Apex Strategy 2.4% 10.6%
AQR Helix Strategy 0.0% 7.0%
AQR Delphi Long-Short Equity Strategy 1.8% 13.9%
Man Group AHL Alpha Programme -2.19% -10.61%
Man Strategies 1783 1.11% 5.35%
Transtrend -5.42% -19.07%
Mount Lucas Management -0.80% 2.55%
(Reporting by Nell Mackenzie in London, Carolina Mandl in New York and Summer Zhen in Hong Kong; Editing by Dhara Ranasinghe and Susan Fenton)
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