Opalesque Industry Update - Opalesque Industry Update - Global financial markets posted strong gains in July as equities recovered from the June losses on strong earnings releases led by Starbucks, Facebook, Wells Fargo and other US Financials. Equity markets posted gains across regions, sectors and capitalization, with leadership from small cap, Biotechnology, Healthcare & Financials. European equity gains were led by France, Italy, the Netherlands, Spain and Sweden, while Asian gains were led by Australia and Hong Kong as equity volatility declined. The US yield curve steepened as yields increase across mid-to-longer dated maturities rose while shorted dated yields declined for the month, high yield credit tightened over 100 basis points. Energy and Metal commodities gained led by Oil, Gold and Platinum, while agricultural commodities declined led by sharp declines in both Corn & Soybeans. The US dollar declined against the Euro but was little changed against both the British Pound and Japanese Yen. Hedge funds posted gains for the month, with the HFRX Global Hedge Fund Index gaining +1.01% and the HFRX Market Directional Index gaining +1.87%.|
HFRX Equity Hedge Index posted a gain of +2.57% in July, with contributions from Fundamental Value, Growth and Market Neutral strategies. The HFRX Fundamental Value Index rose +2.91% with contributions from positioning in large cap US and European Financial, Telecom and Cyclical sectors, the Index leads EH sub-strategies for 2013 with YTD gain of +11.8%. The HFRX Fundamental Growth Index gained +2.32% with contributions from exposure to global equities with concentration in Healthcare, Industrial and Cyclical sectors in developed markets partially offset by exposure to Latin American equity. The HFRX Market Neutral Index gained +0.60% as positive contributions from small cap fundamental managers were partially offset by factor-based strategies.
HFRX Event Driven Index posted a gain of +1.68% for the month, with contributions from Shareholder Activist and Credit strategies. The HFRX Special Situations Index rose +2.08% with contributions from exposure to transactions in the Energy/Basic Materials, Media and Industrial sectors as well as Dell, Air Products, Elan, Yahoo and Health Management Associates; the Index leads all ED strategies for 2013 with YTD gain of +11.78%. The HFRX Merger Arbitrage Index gained by +0.65%, with contributions from transactions in KKR/Gardner Denver, FNB Corp/BCSB Bancorp, First M&F/Renasant, MAA/Colonial Properties, Thermo Fisher/Life Technologies and Publicis/Omnicom; the HFRX Distressed Index posted a gain of +1.47%.
HFRX Macro Index posted a decline of -0.54% in July, with declines from quantitative Systematic CTA and Fixed Income strategies, partially offset by Emerging Markets exposure. The HFRX Macro: Systematic Diversified Index declined -0.83% with weakness across Commodity & Fixed Income strategies, while the HFRX Emerging Markets Index posted a modest decline of -0.04% with contributions from Emerging Asian exposure partially offset by Latin American exposures.
The HFRX Relative Value Arbitrage Index gained +0.02% for the month, with contributions from Global Convertible and Corporate Fixed Income managers offset by weakness in Commodity Arbitrage strategies. The HFRX RV: Convertible Arbitrage Index gained +1.15% with gains across US and Global convertibles as high yield credit tightened to below 5 percent, while HFRX Fixed Income Credit Index posted a gain of +1.03%. HFRX Multi-Strategy Index declined by -0.48% as gains in Credit strategies were offset by Commodity Arbitrage exposures.