Hedge funds bested the broader markets in June, but at the cost of the industry's first losing month of the year.
The average hedge fund dropped 1.3% last month, according to the Hennessee Hedge Fund Index. The Standard & Poor's 500 Index fell 1.5% in June.
"Hedge funds posted their first monthly loss of the year in June," Hennessee Group co-founder Charles Gradante said. "While June saw the return of a 'risk-on, risk-off' trading environment, many managers maintained portfolio exposures, viewing the correction as technical in nature and not reflective of a change in underlying fundamentals."
"We are likely to see the beginning of a reversal in the long S&P 500 and short emerging markets trade," he continued. "Global and macro managers are likely to go long emerging markets and short the S&P 500."
Equity long/short hedge funds lost 0.75% on the month.