Fri, Oct 21, 2016
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

HFRI Fund Weighted Composite Index gained +1.4% in July (+4.73% YTD)

Wednesday, August 07, 2013
Opalesque Industry Update - Hedge funds posted gains across Equity Hedge, Event Driven & Relative Value Arbitrage strategies in July, as most strategies reversed losses from the prior month on strong earnings, acceleration of M&A activity, moderating concerns of a sharp rise in interest rates and receding macro risks. The HFRI Fund Weighted Composite gained +1.4 percent for the month, the highest monthly performance since January, according to data released today by HFR, the established leader in the indexation, analysis, and research of the global hedge fund industry.

The HFRI Equity Hedge Index led strategy performance in July with a gain of +2.5 percent; Equity Hedge gains were broad based across sub-strategies, sparked by strong earnings reports by Starbucks, Facebook and US Financials and led by HFRI Technology/Healthcare, Energy/Basic Materials and Fundamental Value strategies. The HFRI Equity Hedge: Technology/Healthcare Index gained +4.0 percent in July, the best monthly performance since September 2010, while the HFRI EH: Energy/Basic Materials posted a gain of +3.7 percent, the best monthly performance for energy focused funds in 18 months. Fundamental Value strategies added +3.3 percent in July, with contributions from US, European and Asian exposures, as well as from US Consumer, Financial and Energy sectors. With the July performance, Equity Hedge surpassed YTD performance of Event Driven, leading all main strategy indices with a +7.7 percent gain.

Event Driven strategies also gained in July, with the HFRI Event Driven Index up +1.5 percent, reversing the -1.1 percent decline of the prior month. Event Driven performance was led by Activist and Special Situations exposures, with these adding +3.8 and +1.8 percent, respectively, in the month. Positioning across Sony, Dell, Apple, Yahoo and Herbalife, as well as M&A positions in Elan, Air Products and Publicis/Omnicom all contributed to performance gains. HFRI Distressed Index gained +1.4 percent while the HFRI Merger Arbitrage Index advanced +1.0 percent. Fixed Income-based Relative Value strategies were also positive in July, as high yield credit tightened and concerns about sharp rise in interest rates associated with a near term extraction of stimulus measures by the US Federal Reserve subsided. The HFRI Relative Value Index gained +0.4 percent for the month, led by Volatility and Asset Backed strategies, which increased by +1.2 and +0.8 percent, respectively.

Macro hedge funds posted their third consecutive monthly decline, with the HFRI Macro Index down -0.1 percent. The HFRI Macro: Systematic Diversified/CTA Index declined -1.1 percent for the month, with weakness from sharp reversals in Commodity and Currency strategies. Discretionary Macro exposure in Energy & Commodity, as well as Active Trading strategies, had positive contributions, partially offsetting CTA losses.

The HFRI Fund of Hedge Funds Index also posted a gain of +1.3 percent. Despite recent capital outflows, the FOF Index has posted a YTD performance of +4.78 percent, in line with the YTD gain of +4.73 percent of the Fund Weighted Composite Index.

“In sharp contrast to the volatile, risk-off sentiment of the prior month, hedge fund performance in July was driven by a positive tone to earnings season and a dynamic environment for M&A including strategic transactions, shareholder activist and special situations exposures, contributing to a favorable operating environment for long/short strategies,” stated Kenneth J. Heinz, President of HFR. “While many managers continue to position for a gradual extraction of stimulus measures by the US Federal Reserve and correspondingly rising bond yields, fundamentally driven, valuation-oriented strategies produced strong results in July as risk-off sentiment moderated from the prior month and investor risk tolerance continued to normalize. While the risks associated with Fed tapering remain salient, managers are well positioned at present for the opportunities in EH and ED strategies, maintaining short portfolio duration, cautious high yield exposure and mixed exposure to commodities in order to remain flexible, tactical and opportunistic in 2H13.”


Press Release


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. M&A - U.S. hedge fund HarbourVest is shock winner in the £1.1bn SVG Capital takeover saga, Hedge fund Parvus shows hand, toppling William Hill merger deal[more]

    U.S. hedge fund HarbourVest is shock winner in the £1.1bn SVG Capital takeover saga From The fierce battle to buy Britain's biggest private equity group has come to an unexpected conclusion, with the original bidder walking away with the prize. SVG Capital has agreed

  2. Marc Lasry: Energy is still a phenomenal opportunity[more]

    From Distressed debt specialist Marc Lasry said energy debt is still a "phenomenal opportunity" because investors can get "massively overpaid" for the risk they take on. There are "huge opportunities" in the energy sector especially in restructurings, the Avenue Capital Group CEO said Tues

  3. Opalesque Exclusive: Ex-SAC manager re-emerges with market neutral hedge fund[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: A manager re-emerged from the SAC battleground last year to launch his own hedge fund under the umbrella of New York-based investment firm Endicott Group.

  4. North America - Hedge-fund manager Kyle Bass says the U.S. is on track for stagflation, Billionaire hedge fund titans Dinan, Lasry on election, markets and best investment ideas[more]

    Hedge-fund manager Kyle Bass says the U.S. is on track for stagflation From Kyle Bass, founder of Hayman Capital Management, on Wednesday warned that the U.S. is headed toward so-called stagflation. Stagflation is typically described as persistently high inflation and hi

  5. Macro hedge funds up 3.3% in one week on Fed and Brexit pays off[more]

    Komfie Manalo, Opalesque Asia: Hedge funds were boosted by the strong performance of global macro funds, with the Lyxor Global Macro Index gaining 3.3% as of the week ending Oct. 11 (-1.7% YTD), Lyxor Asset Management reported. Their short on the p