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

Steinbrugge: Will Hedge Funds Help or Hurt During the Next Market Correction?

Sep 7 2016 | 11:55pm ET

Most investors have become accustomed to quick rebounds when markets correct, but...

Lifestyle

Quattrex Sports AG Debuts Soccer-Focused UCITS Fund

Sep 9 2016 | 9:54pm ET

Innovative alternative investment company Quattrex Sports has unveiled a new UCITS...

Guest Contributor

Malik: The Ever-Changing Middle Market and The Entering Class of 2016

Sep 2 2016 | 5:01pm ET

Deal sourcing and origination is only going to get more competitive given current...