Beverly Chandler, Opalesque London:
Lyxor reports that all Lyxor Indices ended the month of June in negative
territory, with the worst index performers the CTA Long Term
(−2.64%), the Lyxor Long/Short Equity Market Neutral Index
(−2.45%) and the Long/Short Equity Credit Arbitrage Index
(−2.40%). As a result, the Lyxor Hedge Fund Index posted a negative
performance at -1.63% in June but is in positive territory at the end of the first half of 2013, up 1.85% year to date.
The firm writes that hedge fund performance in June was hurt by de-risking
and a re-pricing of all assets due to higher bond yields. Most
asset classes declined in value and hedge funds were hurt
by a lack of safe haven and higher correlation among assets.
Lyxor feels that the bulk of the bond yields re-pricing might be
finished. "Though higher yields over the next 12 months
remain a distinct probability, few market participants expect
bond yields to increase by the same sharp pace as in June."
Beyond that, investing in emerging markets proved difficult in
June as the entire asset class sold off on the back of the rate
funding spike in China. "This funding spike was temporary
and might recede as the authorities in China find a balance
between curtailing credit growth and keeping financial
markets functioning smoothly. According to managers on the
Lyxor Managed Account Platform, the dislocation in asset
prices in June represents a......................
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