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Bailey McCann, Opalesque New York:

New data from hedge fund administrator Citco shows that fund of hedge funds had a positive first half of 2023, with the average fund returning 2.87% to end of June. 82% of funds delivered positive returns in the first half of 2023 - versus just 35% in the first half of 2022 and 43% for the full year 2022, Citco says.

Fund of funds of all sizes achieved positive performance in the first half, with smaller funds with less than $100M AuM the top performers with an average return of 3.38%.

At the strategy level, fund of funds with less concentrated portfolios did the best. According to Citco, strategies with 30-50 underlying positions performed best in the period, with an average return of 5.18%, while funds with between 20-30 holdings saw the lowest average return of 1.29%.

Equity long/short FoFs had the highest performance with an average return of 4.79% during the period, followed by multi-strategy at 3.55%, and convertible arbitrage at 2.88%.

The outlier in Citco's data was global macro which experienced negative performance in the first half of -6.34%. Many global macro funds did well last year, but even then there was significant dispersion in returns and those gaps are making themselves more obvious this year. The variance in central bank policy, coupled with turbulence in the broader market has given macro managers more trading opportunities, but it's not always clear what the right bet will be. The banking ......................

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