The median hedge fund lost 1.04% last month, according to Deutsche Bank's most recent Markets Prime Finance Hedge Fund Trends, dragging global median performance down to 3.80% through the end of June.
Distressed funds extended their gains to 8.72% year to date, with equity long/short strategies up 6.02% YTD. In terms of regions, Japan long/short funds are up 16.71% YTD. DB said global dispersion of returns across funds remains high with funds in the 75th percentile up 0.35% and funds in the 25th percentile down.
DB said that in meetings with investors in Canada, Virginia and Europe last month, large Canadian pensions indicated that they continue to allocate opportunistically with a focus on macro and market neutral strategies. In Virginia, investors are resisting taking a market view and looking at investments from a bottom up perspective.
Hedge funds' short targets in June included BlackBerry and Molycorp. The borrowing of Japanese equities has been on the rise, even as the benchmark Nikkei has lost ground. Chinese banks were a short interest focus, according to DB “with rising concerns about the lack of transparency in the shadow banking systems, non-performing loans and rising systemic risk.”