Tue, Apr 24, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Morningstar 1000 Hedge Fund Index rose +2.7% in July, funds saw outflows of $1.6bn in first half of year (through June)

Monday, August 23, 2010

Nadia Papagiannis
Opalesque Industry Update - Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today reported preliminary hedge fund performance for July 2010 and asset flows through June. Hedge funds returned to the black in July. The Morningstar 1000 Hedge Fund Index rose 2.7%, while the currency-hedged Morningstar MSCI Composite Hedge Fund Index climbed 0.9%. Year to date through July, these indexes were up 0.4% and 1.7%, respectively.

Global stock markets bounced back in July, especially in Europe, as concerns over the debt crisis eased. European-equity-focused hedge funds missed out on much of the market rally, however. The Morningstar Europe Hedge Fund Index increased 5.6%, while the MSCI Europe NR Stock Index rose 11.6%.

"Confidence returned to the markets in July," said Nadia Papagiannis, alternative investments strategist for Morningstar. "But hedge funds are aware that the positive sentiment may be fleeting, and are thus prepared for another downdraft."

A rebound in the stock markets and investor sentiment, especially in Europe, also helped corporate event-driven hedge funds, which trade stocks of companies involved in mergers and tender offers, to post significant gains. The Morningstar Corporate Actions Hedge Fund Index rose 3.2% in July and is up 7.3% for the year to date. Deal volume improved in July in Europe and Asia but is still down year over year in developed markets.

The credit markets recovered in July. Positive corporate earnings surprises, stress tests of European banks, and a falling default rate led to a narrowing of credit spreads, especially in high-yield debt. Tightening spreads spelled profits for long-biased debt and fixed-income arbitrage hedge funds. The Morningstar Debt Arbitrage Hedge Fund Index rose 3.1% in July. Convertible bonds also benefited in July, and the Morningstar Convertible Arbitrage Hedge Fund Index increased 3.5% for the month.

While many hedge fund strategies returned to profits in July, hedge funds that take macro-economic bets using derivatives continued to suffer. The Morningstar Global Trend and Global Non Trend Hedge Fund Indexes gained only 0.6% and 0.7%, respectively, in July. Theses indexes finished the year though July 31 down 2.4% and 1.0%, respectively. Trend-following hedge funds profited from rallies in wheat and the decline in the U.S. dollar in July, but reversals in the stock index and Treasury bond market caused losses.

Although multi-strategy hedge funds and hedge funds of funds saw positive outcomes in July, the Morningstar Hedge Fund of Funds Index remains in the red for the year to date through July 31. Through June 30, multi-strategy funds in Morningstar's database experienced net outflows of $2.8 billion, the largest of any category. Funds in Morningstar's Global Non Trend and Corporate Actions hedge fund category saw the largest net inflows in the first six month of the year of $2.6 billion and $2.3 billion, respectively. Overall, funds in Morningstar’s hedge fund database saw outflows of $1.6 billion through June 30.

Source

kb

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Sequoia takes Facebook stake as shares slide in data controversy, $1.4b hedge fund sees intact fundamentals for Facebook, Jim Cramer reveals some 'suggested hedge fund trades' amid the Trump tariffs[more]

    Sequoia takes Facebook stake as shares slide in data controversy From Bloomberg.com: The $4.2 billion Sequoia Fund bought a small position in Facebook Inc. as the stock slid late in the first quarter, investment manager Ruane, Cunniff & Goldfarb told clients. "The recent controversy enab

  2. Activist Investors - Blue Sky-owned Wild Breads faces uncertain future[more]

    From AFR.com: A Blue Sky private equity investment in artisan-style baker Wild Breads enjoyed multiple valuation upgrades despite losing millions and breaching its lending covenants, accounts lodged with the regulator last week show. Wild Breads lost $2.4 million in 2017, but Blue Sky ascribed a hig

  3. Opalesque Exclusive: Barnegat to close hedge fund to outside investors on weak opportunities[more]

    Komfie Manalo, Opalesque Asia: Bob Treue's Barnegat Fund Management said it is closing its $666m fixed income relative value hedge fund to outside investors. "The negative side to gains in Fixed Income Arbitrage is that unless we find new opportunit

  4. Investing - Hedge fund makes a big bet on malls, British hedge fund manager Odey short UK government bonds on QE bet[more]

    Hedge fund makes a big bet on malls From Barrons.com: The dominant narrative on American shopping malls is that they're dead. Crushed by Amazon.com, many brick-and-mortar retail stores are destined for bankruptcy. And where is the most retail, clustered all together? Malls. From a

  5. Performance - Hedge funds suffer first back-to-back loss in two years, Netflix performance burns hedge fund short sellers, Macro hedge fund up 14.5% in first quarter sees dollar falling, Renaissance Technologies rebounds across hedge funds in March[more]

    Hedge funds suffer first back-to-back loss in two years From Bloomberg.com: Hedge Fund returns sank for a second straight month in March, the first back-to-back loss since the first two months of 2016, as trade wars, tech-sector woes and a Fed rate hike dragged down the S&P 500 from its