Hedge Funds Flat In June, Credit Suisse Says

Jul 15 2008 | 11:59am ET

With most indices showing that hedge funds sunk with the equities markets in June, no news is good news. And nothing is exactly what the Credit Suisse/Tremont Hedge Fund Index has to offer.

The widely-followed index was perfectly flat last month, leaving it up 0.51% on the year. That’s better than most hedge fund indices, many of which returned to the red after a difficult June, and much better than stocks.

“Hedge funds performed well compared to global equity markets,” Oliver Schupp, president of the Credit Suisse Index Co., said. “The highest-performing sectors for the month were managed futures and dedicated short bias, both of which were well-positioned to take advantage of volatility in equity and commodities markets. We estimate that five of the 10 hedge fund sectors will end June with gains for the month.”

Unsurprisingly, short-bias funds romped to a 9.02% return last month, instantly making it the second-best performer year-to-date at 11.95%. The year’s best strategy, managed futures, also happened to be second-best in June, posted a 4.79% return (14.86% YTD).

Global macro funds also finished the first half on a strong note, rising 2% (9.22% YTD).

Only two strategies tracked by Credit Suisse suffered losses in excess of 1%. Emerging markets continued to struggle in 2008, dropping 1.59% last month (down 3.55% YTD), and long/short equity funds were battered by falling stock markets, losing 1.33% (down 0.48% YTD). Convertible arbitrage funds remain the worst performers on the year, ending the first half down 5.56% after a 0.36% June decline.

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