Hedge Funds Down In June As Long/Short Take Beating

Jul 6 2010 | 12:35pm ET

Hedge funds seemed to wilt a little in the June heat, one industry index shows.

The Credit Suisse Liquid Alternative Beta Index shed 0.4% last month. The decline, following a 2.64% loss in May, leaves the index down 0.12% on the year.

Despite dipping into the red for the first half, Jordan Drachman, head of research for alternative beta strategies, said there was room for optimism.

“Despite overall negative performance, three out of four LAB sector indices posted gains as managers utilized a number of diverse strategies which generated positive returns across currency and credit markets,” Drachman explained.

None more so than merger arbitrage: The strategy soared 2.15% last month, more than doubling its year-to-date return to 4.04%. Event-driven and global macro funds also posted positive returns, edging up 0.41% (1.64% year-to-date) and 0.14% (down 0.54% YTD), respectively.

So why the negative June?

“Long/short equity appeared to be the largest detractor last month as managers in the space continued to suffer from equity market volatility,” Drachman said. Indeed, the strategy shed 1.94% on the month, pushing it and the overall index into negative territory, down 1.21% through the first half.


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of