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In May, global financial markets delivered mixed performance as AI and Technology shares helped drive equity markets to record highs, while Oil posted sharp declines on positive developments surrounding a resolution to the Iran military conflict and the Strait of Hormuz energy supply disruption. Global equity markets advanced, led by Semiconductors and AI-related sectors, as investors positioned for a potentially record-setting IPO cycle in the middle of the year. Interest rates rose amid persistently elevated prices, while the U.S. dollar strengthened. Oil fell sharply but continued to trade within a wide and volatile range, driven by ongoing negotiations related to Iran and the Strait of Hormuz.

Hedge funds extended gains led by Macro & Equity Hedge, with the HFRX Global Hedge Fund Index gaining +1.71%.

HFRX Equity Hedge Index gained +2.87% in May from gains in fundamental growth, value, and market neutral strategies. The HFRX Fundamental Growth Index gained +5.37% from gains concentrated in small-cap US and European equities. The HFRX Fundamental Value Index gained +1.71% from gains seen in large-cap US and European equities. The HFRX Equity Market Neutral Index gained +0.05% from gains in mean reverting, factor-based strategies.

HFRX Macro Index gained +2.12% for the month from gains in systematic trend-following managers. The HFRX Macro Systematic/CTA Index gained +1.06% as the U.S. dollar strengthened against most major currencies. Commodities posted a mixed performance, with cocoa and aluminum leading gains while oil, coffee, and rubber led commodity declines.

HFRX Event Driven Index gained +0.93% in May from gains in special situations managers and merger arbitrage strategies. The HFRX Special Situations Index gained +0.99% from gains in exposure to global, catalyst-driven fundamental value equities. The HFRX Merger Arbitrage Index gained +0.08% as M&A deals continued through May and AI & technology led equity market gains.

HFRX Relative Value Arbitrage Index gained +0.91% for the month from gains in convertible arbitrage strategies and multi-strategy managers. The HFRX Convertible Arbitrage Index gained +3.58% as volatility fell in May. The HFRX RV: Multi-Strategy Index gained +0.65% as interest rates rose in the month.

Comments reference performance figures as of May 29, 2026