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Matthias Knab, Opalesque: Hedge funds more than erased their July setback in August, but the month's defining number came from a corner of the industry that rarely makes the headlines: commodities.
The HFRI Macro: Commodity Index vaulted +10.0% for the month, the strongest monthly gain in the index's history going back to its January 2008 inception, as escalating military conflict in Iran, regional shipping disruptions and sharply rising bond yields reordered energy and commodity markets. That performance anchored a +4.1% month for the HFRI Macro (Total) Index and helped lift the HFRI Fund Weighted Composite Index +1.7%, according to data released by HFR, in what the firm described as a month in which interest rates rose to historic highs.
Kenneth J. Heinz, President of HFR, said funds had been "successfully navigating intense compounding macroeconomic risks" to post strong gains led by Macro strategies. While the outlook for equity and fixed income markets in the second half has become less clear, he argued, the outlook for hedge fund performance has improved, with managers delivering returns uncorrelated or negatively correlated to the recent shocks across equities, bonds and commodities. If those risks persist or intensify, Heinz added, investor allocations to the best-positioned managers will be decisive for near and mid-term returns.
Macro takes the month
Beyond commodities, macro sub-stra...................... To view our full article Click here
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