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In April, global financial markets experienced heightened volatility as investors positioned for tariff driven uncertainty regarding supply chain disruptions, export controls, and signs of slowing economic growth. However, volatility eased toward the end of the month amid signs of progress in trade negotiations. Investor sentiment gradually shifted, with increased focus on potential tax cuts, steady corporate earnings, and the prospect of interest rate cuts. Equity markets traded within a wide range throughout the month. Growth and large-cap technology stocks suffered significant intra-month losses but largely rebounded by month-end. The Nasdaq closed with a modest gain, while the S&P 500 and DJIA posted slight declines. Sector performance was mixed, with energies leading declines. European and Asian equity markets also showed mixed results. Long-term interest rates rose while short-term rates declined, and the U.S. dollar weakened sharply in April. Commodities also declined broadly, with oil, natural gas, copper, silver, and rubber leading the way.

Hedge funds posted mixed performance with the HFRX Absolute Return Index gaining +0.26%, while the HFRX Global Hedge Fund Index declined -0.43%.

HFRX Relative Value Arbitrage Index gained +0.18% in April led by gains in multi-strategy managers and convertible-arbitrage strategies. The HFRX Fixed Income Convertible Arbitrage Index gained +1.15% as volatility rose in April. The HFRX RV: Multi-Strategy Index gained +0.09% as interest rates were mixed for the month.

HFRX Event Driven Index narrowly gained +0.001% for the month as gains in merger arbitrage strategies were offset by declines in special situations managers. The HFRX Merger Arbitrage Index gained +0.51% as global equity markets saw heightened volatility and mixed results for the month. The HFRX Special Situations Index declined -0.03% from declines in exposure to global, catalyst-driven fundamental value equities.

HFRX Equity Hedge Index declined -0.004% in April as gains in market neutral and fundamental growth strategies were offset by declines in fundamental value strategies. The HFRX Fundamental Growth Index gained +0.39% from gains in exposure to small-cap US & European equities. The HFRX Equity Market Neutral Index gained +0.17% from gains in mean reverting, factor-based strategies. The HFRX Fundamental Value Index declined -0.23% from declines concentrated in large-cap US & European equities.

HFRX Macro/CTA Index declined -3.01% for the month from declines in systematic trend-following managers. The HFRX Macro Systematic/CTA Index declined -4.49% as the US Dollar weakened against most currencies and commodities saw declines in April. Oil, natural gas, copper, silver, and rubber experienced the largest declines.

Comments reference performance figures as of April 30, 2025