UBS Unified Global Alternatives team

Executive summary

Market context

Risk assets generated positive performance in April. The outsized results were primarily a function of the announced ceasefire in the Middle East, as well as the continued earnings and capital expenditure growth in the corporate space, especially from the mega tech and AI companies. Solid macroeconomic data was also supportive of asset prices, as uncertainty related to the war has yet to restrict growth. US equities: Dow Jones 7.14%, S&P 500 10.42%, NASDAQ 15.29%. Europe: MSCI Europe 4.63, FTSE 2.43%, and DAX 7.33%. Asia: Nikkei 225 16.10%. Emerging Markets: Brazil -0.08%, China 5.66%. Rates/credit: US 2Y at 3.88% (from 3.79%) and the US 10Y at 4.39% (from 4.30%). Barclays US IG 0.45% and HY 1.69%. Commodities/FX: Gold -1.00%; oil +12.80%. The euro rose 1.51% (1.1558 → 1.1733), while the USD fell 1.52% versus the JPY (159.10→ 156.68).

Sources: Pound Sterling Live, Exchange Rates UK, U.S. Department of the Treasury, Bloomberg, Gold Price, Business Insider

Hedge fund highlights

Equity Hedge: Equity Hedged strategies rebounded strongly in April, driven by renewed risk-taking in technology and momentum stocks, positive fund flows, and strong Asian market performance. US and European managers saw gains, with technology, AI, and biotech leading. Risks remained from potential Middle East supply disruptions.

Relative Value / Event Driven: Relative Value strategies performed well in April, with quantitative equity and convertible bond strategies leading gains. Fixed income rebounded as volatility eased, and agency MBS remained positive.

Credit / Income: Credit/Income strategies posted slight gains in April, supported by long positions in corporate long/short strategies and positive carry from asset-backed, agency, and short-duration private credit, despite modest weakness in interest rate markets.

Trading / Macro: Trading strategies performed well in April, driven by gains in equity trading, interest rates, and energy commodities. Commodity managers benefited from rare earth and energy exposure.

Key takeaways for allocator

Geopolitical optimism drove risk asset gains: The Middle East ceasefire and strong corporate earnings, especially in tech and AI, fueled broad market rebounds and improved sentiment.

Equity hedge strategies benefited from tech and momentum: Hedge funds regained risk, with technology and momentum exposures leading. US and Asian equities outperformed, while Europe lagged due to lower growth and tech drivers.

Relative value strategies rewarded selectivity: Quantitative equity, convertible bonds, and fixed income RV performed well.

Credit/income strategies saw modest gains: Long-biased corporate and carry-focused credit strategies contributed, despite weaker interest rate markets.

Trading and diversifiers added resilience: Macro and commodity trading, especially in energy and rare earths, delivered positive returns.

Performance snapshot (in %)

Index 26-Apr 26-Mar 26-Feb QTD YTD 1Y Annualized Return 3Y Annualized Return 5Y Annualized Return 10Y Annualized Return 10Y Volatility

MSCI World Total Return - Net USD

9.59

-6.37

0.73

9.59

5.68

29.16

19.7

11.29

12.65

14.85

FTSE US Broad Investment-Grade Bond Index

0.18

-1.85

1.66

0.18

0.1

4.11

3.48

0.14

1.68

5.11

Barclays Global High Yield Index

2.58

-2.47

0.2

2.58

1.23

10.44

10.81

4.29

5.37

8.23

Bloomberg Commodity Index Total Return

4.21

11.5

1.1

4.21

29.65

44.82

15.75

13.17

7.58

13.55

ICE BofA Merrill Lynch 3-month T-Bill Total Return Index (G0O1)

0.29

0.29

0.27

0.29

1.14

3.95

4.73

3.4

2.28

2.02

HFRI Fund of Funds Composite Index

4

-2.17

1.12

4

4.76

15.96

9.86

5.19

5.58

5.04

HFRI Equity Hedge (Total) Index

7.32

-4.33

1.5

7.32

6.79

26.27

14.9

7.31

8.85

8.93

HFRI Event-Driven (Total) Index

5.22

-1.42

0.14

5.22

4.75

17.09

11.59

6.63

7.42

7.06

HFRI ED: Credit Arbitrage Index

3.29

-4.95

-0.94

3.29

1.83

9.17

9.36

5.46

6.56

6.67

HFRI Macro (Total) Index

1.84

-2.35

2.68

1.84

6.69

16.82

6.88

5.63

4.39

5.07

HFRI Macro: Systematic Diversified Index

2.33

-1.42

3.36

2.33

9.95

17.75

3.93

3.74

2.68

7.71

HFRI Relative Value (Total) Index

1.76

-0.68

0.76

1.76

3.47

9.51

8.34

5.61

5.46

4.22

Source returns: UGA - Hedge Funds, Bloomberg, Barclays (Lehman) Live, HFR. As of April 30, 2026. These figures are net of all fees in USD. Historical performance indications and financial market scenarios are not reliable indicators of future performance. Please note that the composition, methodology, and reported values of the HFRI Index are subject to periodic updates and revision by Hedge Fund Research, Inc.

Strategy performance

Strategy performance as of April 30, 2026. Historical performance indications and financial market scenarios are not reliable indicators of future performance.

Monthly hedge fund review

Overall market commentary

April was a broadly positive month for the UGA – HF platform. Most strategies contributed positively to performance, which was a sharp reversal from the broad based weakness witnessed in March. The rebound was driven primarily by optimism around the ceasefire deal between the US and Iran. Additionally, a robust earnings season and generally constructive macroeconomic data supported the notion that the escalation of hostilities in the Middle East would have a limited impact on global growth. Investor sentiment appeared increasingly focused on underlying fundamentals and forward-looking earning guidance. Asia and US equities outperformed Europe, consistent with the technology / AI leadership. Overall investor sentiment improved over the period as several market indices approached or set new all-time highs.

Source returns: Source: UGA - Hedge Funds, Bloomberg, Barclays (Lehman) Live, HFR. As of April 30, 2026. Historical performance indications and financial market scenarios are not reliable indicators of future performance.

Equity Hedged

HFRI Equity Hedge Total Index:
MTD 7.32% / QTD 7.32% / YTD 6.79%

Equity Hedged strategies were significantly positive in April. Following the sharp drawdown in March, hedge funds generally scaled back into risk, with a particular focus on core ideas largely centered in technology and momentum exposures.  The negotiations post ceasefire in the Middle East allowed market participants to look towards the start of earnings season, while flow of funds became increasingly positive. Asian markets outperformed again amid supportive price action and improved forward earnings expectations. Korea and Japan were notable outperformers, while Chinese markets posted solid gains. While our exposure in this region was limited, it was impactful to portfolios where it was held. European managers also generated positive returns but tended to lag other regions due to lower growth potential, fewer technology and AI drivers, and greater vulnerability to supply shocks. US managers produced broad based gains across the platform, with results favoring those managers that were able to retain their net long bias during the market correction in March. Sector leaders for the platform included technology / AI and biotech, where there tended to be some early visibility around 2027 capital expenditures.

Forward looking earnings revisions for 2027 were also a catalyst for price appreciation. In terms of flows, systematic platforms bought back about half of what they have sold year-to-date. Pension-related equity supply has largely run its course, removing a headwind. Retail flows continued unbated with strong buying throughout the month.

Please note that the composition, methodology, and reported values of the HFRI Index are subject to periodic updates and revision by Hedge Fund Research, Inc.

Relative Value

HFRI Relative Value Total Index:
MTD 1.76% / QTD 1.76% / YTD 3.47%

Relative Value strategies delivered positive performance in April. Quantitative equity strategies, the lone bright spot in March, delivered positive results again in April. Convertible bond strategies were also positive, driven by a strong issuance climate and positive credit landscape. Fixed income relative value strategies rebounded as interest rate volatility eased and macro themes were accretive. Agency MBS strategies have performed well where carry income was featured amid limited prepayments and only modest moves in the mortgage basis.

Credit / Income

HFRI ED: Credit Arbitrage Index
MTD 3.29% / QTD 3.29% / YTD 1.83%

Credit / Income strategies were slightly positive in April. Interest rate markets were modestly weaker in line with some retreat in US Treasury yields. The moves in interest rates paled in comparison to the move in equities. Traditional corporate long / short strategies contributed to positive performance where long positions drove results. Carry themes across asset-backed, agency and short duration private credit sub-strategies were also accretive.

Trading

HFRI Macro Total Index:
MTD 1.84% / QTD 1.84% / YTD 6.69%

Trading strategies were broadly positive in April. Both developed and emerging market macro strategies were supported by equity trading, long-biased interest rate exposure, carry and long-biased exposure to energy related commodities. Dedicated commodity managers produced overall positive returns as long-biased exposure to rare earth metals as well as length to the energy complex produced gains.

Source: UGA - Hedge Funds, HFR. For illustrative purpose only. As of April 30, 2026. Historical performance indications and financial market scenarios are not reliable indicators of future performance. Please note that the composition, methodology, and reported values of the HFRI Index are subject to periodic updates and revisions by Hedge Fund Research, Inc.

This document has been prepared by UBS Asset Management (Americas) LLC, acting through Unified Global Alternatives - Hedge Funds (“UGA - Hedge Funds” or “UGA - HF”), a provider of hedge fund strategies. It contains UGA - Hedge Funds' view of market events during the specified period and all such information and opinions are subject to change without notice, and does not pertain specifically to products managed or advised by UGA - Hedge Funds. The materials are provided for information purposes only and do not constitute investment advice. The information contained herein is believed to be reliable but its accuracy is not guaranteed. This publication encompasses UGA - Hedge Funds’ views based on our internal manager universe and are subject to change. The universe includes managers that are either invested in or followed by UGA - Hedge Funds and does not represent all hedge fund managers and strategies available in the industry. Any indices shown throughout this report are for illustrative purposes only and not a representation of UGA - Hedge Funds universe performance.

Code : C-05/26 M-004918 M-004921

Endnotes

Latest insights

We’re here to help

Contact us

For general inquiries with UBS Asset Management, fill in a form with your details and we’ll be back in touch.

Our leadership team

Our global leadership team is deep, diverse, and dedicated to our ethos of delivering investment excellence.

Find your local UBS office

As your expert global partner, we're closer than you think. Discover UBS's locations in your region.