Opalesque Industry Update - UCITS compliant Hedge funds posted a decline for the month but outperformed the broader hedge fund industry, with the HFRU Hedge Fund Composite Index declining -0.20% in August 2013. |
• HFRU Relative Value Arbitrage Index posted a modest decline of -0.04% in August, with gains in Volatility strategies and hedged Fixed Income exposure, offset by declines in Emerging Markets, Real Estate and Japanese Convertibles exposures.
• HFRU Event Driven Index posted a narrow decline of -0.06% in August, with positive contributions from European Equity Special Situations and Asian Credit strategies offset by declines in Emerging Markets Fixed Income exposure; Global & European M&A had mixed contribution to Index performance.
• HFRU Macro Index posted a narrow decline of -0.08% in August, with positive contributions from Systematic Commodity managers which were offset by declines in Global Discretionary, Currency and Emerging Markets strategies.
• HFRU Equity Hedge Index posted a decline of -0.40% in August, with positive contributions from European and Chinese equity exposure offset by declines in Emerging Markets concentrated in Turkey, India, Brazil and Latin America.
Global financial markets declined in August as Emerging Market equities and currencies extended prior month declines, and investors positioned for volatility associated with reduction of stimulus by the US Federal Reserve and uncertainty over possible military conflict in the Middle East. Losses across Emerging Markets were widespread across the Middle East, Turkey, Egypt, India, Russia & Thailand, while Brazil and China posted gains partially offsetting prior month losses.
European equities declined, led by the UK, France & Germany, while Asian equities were mixed with losses in Japan offset by gains in China & Australia.
US equities posted the worst monthly decline for 2013, with declines across most sectors led by Large Cap, Financials, Real Estate, Technology and Healthcare.
Despite the weakness, yields rose across UK Gilts, German Bunds, the Netherlands and France, while both investment grade and high yield credit widened. US government bond yields rose with increases concentrated in shorter maturities as the yield curve flattened.
The US Dollar was mixed against developed market currencies, rising against the Euro while falling against the British Pound Sterling, however Emerging Market currencies continued to fall against the US Dollar, with declines led by the Indian Rupee, Mexican Peso, Brazilian Real and South African Rand.
Energy and Metals commodities gained on the prospects of supply disruptions, led by gains in Oil, Natural Gas, Silver, Gold and Platinum, while Agricultural commodities generally posted declines led by Coffee, Sugar, and Wheat & Live Hogs.