Canadian hedge fund managers had a lousy May, but the money managers' small losses pale against the slide in public markets and performance at global peers.
Canadian hedge funds were down 0.86 per cent on an asset-weighted basis in May, according to the latest update from Scotia Capital. While no one likes to lose money, that slight decline is far better than the 3.67 per cent drop in the S&P/TSX benchmark and the 8.2 per cent nose dive by the S&P 500.
On an equal-weighted basis, the Scotia Capital hedge fund performance index was down 2.02 per cent in May. Year-to-date, the investment dealer found the fund managers are up 3.47 per cent on an asset-weighted basis, which takes the size of funds into account, and 1.77 per cent on an equal-weighted basis.
"Canadian hedge fund managers outperformed global peers in aggregate in May," said Scotia Capital in a commentary on the results. The dealer measures numbers at 39 domestic money managers, and to qualify, funds must have one-year track records and a minimum of $15-million in assets.
"There was wide dispersion in performance among managers, as well as within strategies, with some managers managing to capture strong monthly results despite a challenging trading environment," said Scotia Capital's team, noting that being long technology, financial or energy stocks was a bad idea last month, as all three sectors underperformed.
"Hedge fund managers remain defensively positioned and cautious, maintaining low net exposures in an environment of ongoing uncertainty," said the hedge fund analysts.