June Is Lucky Number 12 For Hedge Funds

Jul 11 2007 | 10:44am ET

Hedge funds made it 12 months in a row in positive ground with a 0.9% advance in June, the Barclay Group said today. Over that period, hedge funds have added 14.4%.

“Over the past 60 months, the Index has fallen in 10 months and risen in 50 months, making it a fairly comfortable ride for investors,” Barclay founder Sol Waksman said.

After June’s upswing, the Barclay Hedge Fund Index is up 7.55% this year. By contrast, the Standard & Poor’s 500 is up just 6.96% after equity markets took a beating last month.

Still, 15 out of Barclay’s 18 indices rose on the month. Equity short-bias gained 2.5%, emerging markets 2.25%, Pacific Rim equities 1.62% and global macro 1.59%.

“Equity markets in the U.S. and many other developed economies experienced price declines during the month, however hedge funds devoted to equity strategies were still able to make a profit in June,” Waksman said. “Continuing problems in the sub-prime loan market have resulted in the closure of several funds specializing in the sector. But spill-over effects into the larger hedge fund sectors have been very limited.”

The only strategy tracked by Barclay with a “significant drop” last month was event-driven, which fell 0.77%, a decline Waksman attributed both to the weak equity and bond markets.

Year-to-date, the indices with the strongest performance at emerging markets (12.9%), equity long-bias (9.96%), merger arbitrage (9.36%), distressed securities (8.57%) and European equities (8.38%).

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