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Opalesque Industry Update - June was a disappointing month for all hedge fund strategies, except Market Neutral Equity and Volatility Arbitrage. The turmoil in European debt markets, the growing uncertainty about an increase in the US debt ceiling, concern about the sustainability of economic growth in the US, and fears of tightening in China and other emerging markets all conspired to weaken both high yield debt and equity markets. Long-biased credit and equity hedge fund strategies all lost money as a result. Discretionary Macro funds, that have focused to a large extent on the prospects for inflation and a weaker US dollar posed by loose monetary policies, lost money as well when rates fell on US government bonds and the US dollar rose in value. Returns on most strategies remain positive for the year despite the weak Q2 performance, with the exceptions being those involved in emerging market equities and macro strategies. Distressed Investments continue to lead all strategies with a YTD gain of 4.22%. Market Neutral Equity funds appear to have weathered the month of June, precisely because of their lack of net exposure, and Volatility Arbitrage turned positive for the year, as the problems noted above eroded the confidence of investors globally.
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Industry Updates
Market Neutral and Volatility Arbitrage only hedge fund strategies on Lyster Watson Index to notch positive June performance
Monday, July 18, 2011
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