Hedge Fund Returns Mixed In June

Jul 16 2009 | 11:01am ET

Hedge funds followed up their best month in nearly a decade with one that was, well, not their best month in nearly a decade.

The Credit Suisse/Tremont Hedge Fund Index rose just 0.43% last month, after soaring 4.06% in May. The index is up 7.18% on the year. By contrast, the Standard & Poor’s 500 Index rose just 0.2% in June, and is up 3.16% year-to-date.

“Hedge funds have finished in positive territory for five out of the last six months, posting returns of 0.43% in June, with gains for the year totaling 7.18%,” said Oliver Schupp, president of the Credit Suisse Index Co. “The second quarter appears to have been a turning point for hedge funds with 87% of all gains for the year generated in the last three months.”

June’s returns meet the very definition of the word “mixed”: Half of the Credit Suisse’s strategy benchmarks were in the black, half in the red.

Convertible arbitrage funds led all comers with a 4.05% return (23.95% year-to-date). Fixed-income arbitrage funds rose 1.83% (11.82% YTD), multi-strategy funds 1.62% (12.29% YTD), event-driven funds 1.02% (6.63% YTD) and emerging markets funds 0.69% (13.21% YTD).

Among the losers, none fell faster than managed futures funds, which shed 2.32% in June (down 7.43% YTD). Dedicated short-bias funds also tumbled, dropping 1.96% (down 10.81% YTD), as did global macro funds (down 0.85% in June, up 3.4% YTD) and equity market neutral funds (down 0.21%, up 1.1% YTD).

Long/short equity funds finished the month essentially flat, declining 0.04% in June (up 8.21% YTD).

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