Hedge funds rose 1.2% last month, leaving them up less than one-quater as much as the Standard & Poor's 500 Index for the year.
eVestment's Hedge Fund Aggregate is up 4.49% through July. The S&P500, by contrast, is up 19.62% on the year after a 5% surge last month.
Long/short equity funds led the way in July, rising 2.55% (8.38% year-to-date), followed by event-driven and distressed funds at 1.65% (6.51% YTD), multi-strategy funds at 1.51% (3.27% YTD) and equity-market neutral at 1.1% (1.05% YTD).
"Funds most willing to embrace the current equity market euphoria have been among the industry's best performers," eVestment said. "On a sector-by-sector basis, technology, healthcare and micro-cap funds were best situated in July for another month of new records from equity indices."
Among the less-well-situated were convertible arbitrage funds, up 0.25% in July (3.78% YTD), directional credit (up 0.06% in July, 5.11% YTD), relative-value credit (0.03% (2.36% YTD), macro (down 0.83%, down 0.79% YTD) and managed futures (down 0.87%, down 2.29% YTD).
Developed markets funds topped emerging markets funds, both for the month and for the year, with the former up 1.71% (8.57% YTD) and the latter 1.34% (2.14% YTD). Among emerging markets, Africa and the Middle East was the place to be last month, with funds focused on those regions rising 5.12% (14.72% YTD) and Brazil the place not to be (down 1.74%, down 7.56% YTD).
eVestment also reported June hedge fund outflows, with investors pulling $7.81 billion from funds on the month, cutting year-to-date net inflows to $4.02 billion. Relative-value credit funds were most popular, taking in $6.8 billion in new capital, and macro and long/short equity were least popular, with net outflows of $4.49 billion each.