Early estimates show that hedge funds gained about 2% in April, led by energy sector funds.

HedgeFund.net reports that its equal weighted benchmark of all single manager hedge funds and CTA/managed futures products returned 1.96% in April, although it is still down 0.85% for the year to date. The HedgeFund.net database consists of over 8,000 current hedge fund, fund of funds, and CTA products.

The firm notes that credit market worries eased in April and equity markets rallied led by the energy, utilities and technology sectors. It reports that energy sector funds produced their best performance in the last 27 months and were the best performing group of hedge funds in April, helping turn their benchmark positive for the year. The HFN
Energy Sector Average was up 5.70% in April and is up 0.22% YTD.

Rising energy prices has also been a boon to funds focusing on specific emerging market countries or regions, it says. The HFN Emerging Markets Average was up 3.23% in April, but it’s still down 2.68% YTD.

Funds focusing on countries with strong fuel or energy production have performed better, it adds. The HFN Middle/East North Africa Average is the best performing EM benchmark in 2008. In April the HFN MENA Average was 6.54%, and it is up 1.36% YTD. Funds focusing in Brazil are the only other EM group to produce positive performance in 2008. The HFN Brazil Average was 4.31% higher in April and uo 0.36% YTD.

Funds investing in India and China rebounded from major drawdowns in the first quarter, but remain in negative territory YTD. The HFN India and China Averages were +7.63% and +6.32% in April, respectively, but are -18.96% and -8.16%, respectively YTD.

Rising oil prices alone were not enough to support CTA/Managed Futures funds in April as a broader drop in non-energy related commodity prices led these funds to underperform in April, HFN says. The HFN CTA/Managed Futures Average remains one of the best hedge fund benchmarks in 2008, up 8.42%, but returned 0.24% in April.

Virtually all equity related strategies provided superior performance in April and most equity related fund benchmarks are soundly beating the S&P 500 Total Return Index in 2008, it reports. In April, Long/Short funds were up 3.16%, Long Only funds gained 4.72%, Small/Micro Cap funds were 3.06% higher and Healthcare and Technology Sector funds were up 3.12% and 4.31%, respectively. Funds focused on the Finance Sector appeared to have taken a bearish position on average and as a result were hurt in April as the HFN Finance Sector Average was down 0.90% during the month and is off 3.00% YTD.