HFRU Indices Mid-April 2014 performance notes

Global financial markets posted declines through mid-April, as asset volatility increased, geopolitical tension over Ukraine and Russia continued to escalate and the NASDAQ Composite entered a market correction phase. US equity market declines were led by Technology, Biotechnology, Healthcare, Financials, Small Cap and Growth exposures, which were only partially offset by gains in Energy and Commodity related exposures. European equities also posted declines led by Russia, Germany, Switzerland and the Netherlands, while Asian equities posted mixed performance with gains in China, Hong Kong and Emerging Asia partially offset by declines in Japan. US treasury yields fell through mid-April as the curve flattened led by gains longer dated maturities; yields also fell across most European bonds, as Greece was able to complete a 3 Billion Euro bonds offering. The US dollar fell against most currencies, declining against the British Pound Sterling, Euro and Japanese Yen, while also declining against the Brazilian Real and Korean Won, though Russian Ruble continued to slide against the Dollar. Energy & Metals Commodities posted gains through mid-April led by Oil, Natural Gas, Aluminum and Gold, while Agricultural Commodities declined as gains in Coffee and Soybeans were offset by Sugar, Cotton & Hogs. UCITS compliant Hedge funds posted declines with the HFRU Hedge Fund Composite Index declining -0.51% through mid-April.

HFRU Relative Value Arbitrage Index posted a narrow decline of -0.03% through mid-April, with positive contributions from exposure to Fixed-Income and Asset-Backed strategies offset by declines in Global Convertible and Multi-Strategy managers.

HFRU Macro Index posted a modest decline of -0.12% through mid-April, with positive contributions from commodity strategies offset by quantitative, trend following CTA and European equity strategies.

HFRU Event Driven Index posted a decline of -0.45% through mid-April, with negative contributions from European and US Equity Special Situations and Global Merger Arbitrage managers only partially offset by gains in hedged credit strategies.

HFRU Equity Hedge Index posted a decline of -1.13% through mid-April, with losses concentrated in exposure to European, Russian, Healthcare and Technology strategies only partially offset by exposure to Market Neutral, Turkey, Brazil and MENA strategies.

Comments reflect performance figures as of April 16, 2014.

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