Hedge Funds Fall In June, Indices Show

Jul 9 2008 | 2:00am ET

Hedge funds took a step back to end the second quarter, with three major indices showing losses in June after two consecutive months of gains.

Greenwich Alternative Investments’ Greenwich Global Hedge Fund Index dropped 0.42% in June to return to the red year-to-date, down 0.1%, while Hedge Fund Research’s HFRI Fund Weighted Composite Index declined 0.68% (down 0.75% YTD). But experts insist that the news is not all bad.

“The downside protection that characterizes hedge funds is clearly evident this year with long-only equity indices experiencing losses of 10% or more,” Margaret Gilbert of Greenwich AI noted. Indeed, the Standard & Poor’s 500 suffered an 8.48% drop last month, and is down 12.19% on the year.

Dow Jones said that event-driven funds fell by 2.8% in June, wiping out its year-to-date returns and leaving it down 0.01% in the first half. Distressed securities and merger arbitrage also posted losses, dropping 1.36% (down 5.11% YTD) and 1.03% (up 0.4% YTD), respectively.

Greenwich said that long/short equity funds lost 1.3% (down 2.08% YTD), especially value funds, which fell 2.34% (down 3.3% YTD). Emerging markets funds also continued their downward spiral, falling 3.62% (down 7.28% YTD).

Likewise, HFRI’s biggest losers were emerging markets funds. Last year’s high-flyers continued their sharp decline on the year, falling 3.42% overall (down 6.74% YTD), with Asia ex-Japan funds remaining the year’s worst-performer after shedding a further 5.57% (down 14.16% YTD).

Other decliners in the HFRI indices were fixed-income convertible arbitrage funds (down 3.51% in June, down 7.62% YTD), quantitative funds (down 2.56%, down 3.25% YTD), technology and health care funds (down 2.52%, down 3.35% YTD), equity hedge funds (down 1.85%, down 3.31% YTD), event-driven funds (down 1.01%, down 1.91% YTD) and relative value funds (down 0.5%, down 1.22% YTD).

Not all hedge funds were in the red in June. Equity market neutral, futures, macro and especially short-selling funds enjoyed a successful month, according to the indices. Short-sellers posted a 9.39% gain betting against the falling equities markets, according to Greenwich AI, while HFR said they rose 8.6% (up 12.2% YTD).

Funds of hedge funds fared no better than their single-manager compatriots: The HFRI Fund of Funds Composite Index fell 0.72% on the month (down 2.29% YTD) and the Greenwich Composite Investable Index fell 0.38% (down 0.1% YTD).


In Depth

Kettera Q&A: The Advantages of Alternative Investment Platforms

Oct 28 2016 | 5:52pm ET

The past several years have seen a distinct push towards easier and cheaper access...

Lifestyle

Midtown's Plaza District Fades As Manhattan Office Landscape Shifts

Nov 22 2016 | 6:32pm ET

Lower leasing costs, more efficient office space and the hope of projecting an image...

Guest Contributor

Nowhere to Hide: Why the Future of Asset Management Depends on Innovation

Nov 15 2016 | 6:55pm ET

Information technology has reshaped the asset management industry’s periphery,...

 

From the current issue of

Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR