Hedge funds started the second quarter of 2008 on a strong note as global stock markets recovered, according to Singapore-based hedge fund research company Eurekahedge.
"The Fed's aggressive response to the weakness across credit markets and the slowing of economic growth in the U.S. went some way in improving investor sentiment during April," Eurekahedge said on their website.
"Rallying equity markets, on the back of a sharp increase in risk appetites, coupled with market reversals across some other asset classes, such as bonds and currencies, were factors responsible for the month's gain," Eurekahedge said.
The MSCI World Index jumped 5% in April, completing the best month since November 2004, as confidence returned following the U.S. subprime loan crisis.
Eurekahedge pointed to Japanese managers as the best performers in April, with the Eurekahedge Japan Hedge Fund Index advancing 3.5%. The report showed similar gains with the Asia Ex-Japan index climbing 2.8%.
The Eurekahedge North American Hedge Fund Index added 1.5%, while the index tracking European hedge funds rose 1.4%. Managers of funds using so-called long-short equity strategies were the best performers because of gains in global stock markets.
Eurekahedge was launched by experienced members of the investment banking community for the hedge fund and investment community. The Eurekahedge Hedge Fund Index tracks the performance of 2,230 funds that invest globally.