Sat, Apr 29, 2017
A A A
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.”

HFR

Press Release

BM

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. Opalesque Exclusive: Ex-Man manager combines sustainable investing with AI/ML[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Dr. Richard Bateson, quant fund manager and physicist, has recently

  2. Other Voices: "Winner-take-all" dynamics and hedge fund investing[more]

    A growing stream of thinking in microeconomics is the concept of "winner-take-all" dynamics. The idea seems simple. A combination of networking economics and classic economies of scale creates situations where there are just a few dominant firms or economic agents who are able to capture significant

  3. Investing - How Chipotle's comeback attracted big data robots and value investors alike[more]

    From Forbes.com: When William Ackman's ailing hedge fund Pershing Square Capital Management bet $1 billion on shares in Chipotle Mexican Grill beginning in July 2016, the stakes couldn't have been higher. Pershing Square was reeling from what would eventually be a near $4 billion loss in drugmaker V

  4. Gondor Capital sees challenges ahead for financial markets as two hedge funds post strong gains in Q1[more]

    Komfie Manalo, Opalesque Asia: Vincent Au, portfolio manager of New York-based hedge fund firm Gondor Capital Management believes that the remaining of the year would be challenging for the financial markets even as his two hedge funds maintain

  5. Service Providers - Colemore launches fee tracking service for limited partners[more]

    Following Colmore's successful launch in January 2017, the firm has announced the launch of FAIR.. FAIR is designed to help private equity investors independently validate fees and incentives charged by underlying managers, saving time and providing an extra level of comfort. There is a glob