Greenlight Capital is still on a roll.


The hedge fund headed by David Einhorn gained an additional 3.4 percent in April, one of the most volatile months in recent years. As a result, the value-driven hedge fund is up 11.9 percent for the year, making it one of the top-performing hedge funds.


In April, the S&P 500 and the Nasdaq Composite were down 80 basis points and up 90 basis points, respectively. For the year, the indices were down 5.3 percent and 9.65 percent, respectively.


It is not clear what drove Greenlight’s April gains. But for more than a year, the hedge fund has been cautious, bordering on bearish.
Institutional Investor previously reported that in its first-quarter client letter, Greenlight asserted the stock market’s sell-off is the beginning of a new bear market, which “are punctuated by ‘rip-your-face-off” rallies based on big headlines, extreme investor sentiment, and experience that buying the dip usually pays off.”


Greenlight also noted that in late February it “pivoted from conservative but not bearish, to bearish.” It said that at the end of the first quarter, the fund cut its net long exposure sharply, to just 19 percent — 86 percent long and 67 percent short.


First-quarter performance drivers could hint at where April gains may have occurred. In the letter, Greenlight said that in the first three months it lost 1.3 percent in its long portfolio but made 5.3 percent each from shorts and its macro book.
The macro book was driven by a 19 percent increase in the price of gold, with Greenlight calling it “by far the biggest winner.” The firm holds positions in gold bars and call options.


It also made money on inflation swaps and SOFR futures positions. The Secured Overnight Financing Rate is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities, generally used to hedge U.S. dollar short-term interest rates.


In April, gold seemed once again to be a major driver of performance, gaining 6.2 percent for the month, according to GoldPrice.
Of Greenlight’s five largest disclosed long positions, two were essentially flat for the month: home building giant Green Brick Partners and annuities seller Brighthouse Financial. Lanxess, a German specialty chemicals company, lost more than 3 percent in April. Coal producer Core Natural Resources was the biggest loser, dropping 6 percent last month.


The only April winner among the top-five holdings was Belgium chemicals company Solvay, which gained 1.8 percent.