By Nell Mackenzie and Summer Zhen
LONDON, May 5 (Reuters) – Hedge funds pounced on the U.S./Iran ceasefire to post positive performances in April, with some reaping returns from bullish bets placed just before the April 8 ceasefire announcement, reports from prime brokerages and industry analysts show.
Stock pickers returned more than 9% in April, their best monthly performance since Goldman Sachs started keeping track in 2016, said the prime brokerage in a note to clients on Saturday.
The S&P 500 index rallied over 10% in April, the European STOXX 600 index gained almost 5%, while the dollar fell almost 2% against a basket of currencies.
Hedge funds benefited from the broad stocks rally and from individual trades that didn’t depend on this, the Goldman Sachs note said.
Tech-focused stock pickers returned a record result, nearly 19% in April, it added.
Systematic hedge funds returned around 2.9% in April, making money from crowded trades and from going with the momentum of markets rather than betting against them, said the note.
By month-end, hedge funds mostly sold stocks but in order to make sure that their overall portfolios were neither long nor short, said another note from Morgan Stanley.
A short bet wins when asset values decline.
Hedge funds able to act fast and change their bets were successful, a report from hedge fund data firm PivotalPath said.
This was true for multi-strategy hedge funds. Faster decision-making processes helped them to recover from difficult markets in March, as they rebuilt wagers focusing on single stocks and relative value trades, its report added.
Big multi-strategy hedge funds such as Schonfeld Strategic Advisors, Citadel and ExodusPoint finished the month positively. The funds declined to comment on the results.
For macroeconomic funds, April was a month of two halves, according to PivotalPath.
“Managers who faded the oil shock early and positioned for de-escalation were well rewarded,” it said.
(Reporting by Nell Mackenzie and Summer Zhen; Editing by Dhara Ranasinghe and Alexandra Hudson)
