Hedge Fund Rise 0.76% On Macro Strength

Aug 8 2011 | 12:34pm ET

Hedge funds had a mixed but broadly positive July, snapping a two-month losing streak, according to data from Hedge Fund Research.

The HFRI Fund Weighted Composite Index rose 0.76% last month. The benchmark is now up 1.55% on the year.

Returns were widely mixed among the HFRI strategy and sub-strategy indices. Macro funds led the way with a 2.52% return to pull themselves back into the black at 0.23% on the year. Emerging markets funds also rose, adding on average 0.71% (0.47% year-to-date).

Other major strategies were close to, if not exactly, flat in July. Equity hedge funds fell an average of 0.09% (up 0.86% YTD), event-drive funds 0.07% (up 3.06% YTD) and relative-value funds 0.01% (up 3.12%).

"Equity markets extended declines in July as investors exhibited concern with regard to both the extension of the U.S. debt limit and continuing concerns about European sovereign debt risk," HFR's Kenneth Heinz said. "U.S. fixed-income yields fell and gold posted record gains, while the U.S. dollar traded in a wide range over the month."

Among sub-strategies, systematic diversified funds shined in July, rising 3.57% (although the strategy remains down 0.02% on the year). Short-bias funds also did well amidst falling equities markets, adding 1.76% (down 4.06% YTD). Russia and Eastern Europe funds rose 1.61% (5.99% YTD), Asia ex-Japan funds 1.44% (down 1.94% YTD), energy and basic materials funds 1.26% (down 2.5% YTD) and private issue and Regulation D funds 1.23%, bringing its year-to-date return to 12.48%, far and away the best of any HFRI strategy or sub-strategy.

Losing sub-strategies were headlined by technology and healthcare funds, which shed 1.52% last month (up 5.14% YTD). Latin America funds lost 0.91% (up 1.4% YTD) and convertible arbitrage funds 0.8% (down 0.63% YTD).

Funds of hedge funds gained 0.65% on the month (0.37% YTD).

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