Mon, Sep 28, 2020
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge funds surge in July

Monday, August 10, 2020
Opalesque Industry Update - Hedge funds surged in July to begin 2H20, with the HFRI Fund Weighted Composite Index (FWC) posting the 2nd highest monthly gain since January 2019 and the 3rd strongest gain since 2010.

The HFRI FWC climbed +3.2 percent for the month, topping the gain of the DJIA, as reported today by HFR.

The investable HFRI 500 Fund Weighted Composite Index advanced +2.8 percent in July, fully offsetting the 1H20 decline to bring YTD performance into positive territory at +0.1 percent, topping the DJIA by 750 basis point (bps) over the first seven months of the year.

Hedge fund gains were spread across all strategies, led by Equity Hedge and Macro. The HFRI Equity Hedge (Total) Index led strategy performance for the month, surging +3.7 percent, with strong contributions from Energy and Technology exposures.

The HFRI EH: Sector-Energy Index vaulted +5.0 percent in July, while the HFRI EH: Technology Index jumped +4.1 percent in July, bringing the YTD return for the tech index to +14.1 percent, leading all sub-strategies for the year.

The HFRI Macro (Total) Index gained +3.5 percent for the month to increase its YTD return to +2.9 percent. July performance was led by the HFRI Macro: Multi-Strategy Index, which surged +5.0 percent, and the HFRI Macro: Systematic Diversified Index, which advanced +3.9 percent, the strongest monthly return since January 2015. For the year, the HFRI Macro: Currency Index leads Macro sub-strategy performance with an +8.2 percent return.

The HFRI Event-Driven (Total) Index gained +2.7 percent in July, while the investable HFRI 500 Event-Driven Index advanced +2.9 percent. ED sub-strategy performance was led by the HFRI ED: Activist Index, which jumped +6.4 percent for the month.

Fixed Income-based RVA strategies also posted strong gains in July, with the HFRI Relative Value (Total) Index advancing +2.1 percent, while the investable HFRI 500 Relative Value Index gained +1.9 percent. RVA sub-strategy performance was led by the HFRI RV: FI-Convertible Arbitrage Index, which surged +3.8 percent, and the HFRI RV: Volatility Index, which added +2.8 percent for the month.

Liquid Alternative and Risk Premia products also advanced in July, with the HFRI-I Liquid Alternative UCITS Composite Index gaining +1.35 percent, led by the HFRI-I Equity Hedge Index, which gained +1.6 percent. The HFR Bank Systematic Risk Premia Credit Index surged +15.4 percent for the month, while the HFR BSRP Multi-Asset Index jumped +10.5 percent. Risk Parity strategies also produced strong returns in July, with the HFR Risk Parity Vol 15 Index vaulting +9.3 percent. The HFR Blockchain Index spiked +30.3 percent for the month, as Bitcoin posted strong gains.

"Hedge funds surged across a wide range of strategies in July, driving the HFRI into positive territory for the year, with strong performance in Technology, Shareholder Activist, CTAs and Volatility, as well as Blockchain/Cryptocurrency, Risk Parity, Risk Premia and liquid alternative products," stated Kenneth J, Heinz.

"Institutional investors are actively looking to increase exposure to hedge funds and alternative strategies in 2H20 as a direct and ongoing result of the intense and extreme volatility from 1H20, including both realized and implied volatility, and positive and negative market cycles. Positive performance for 2020 has contributed to an environment of and expectations for strong industry-wide growth into 2021," Kenneth added.

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. Investing: Tech stocks aren't in a bubble, but investors should be pickier, Credit Suisse says, Pandora tops world's best-performing market as hedge funds exit, What Bill Ackman is investing in now[more]

    Tech stocks aren't in a bubble, but investors should be pickier, Credit Suisse says From Business Insider: Credit Suisse on Thursday trimmed its overweight rating for tech stocks, recommending investors be more selective with their sector picks. Crowding in tech giants and the stocks&#

  2. Investing: Third Point buys stakes in Facebook, Alibaba in Q2, exits Sony, Allergan, Here's what investors with $3.4tn are buying during covid, An energy trader seeks profit from batteries in European markets, Hedge fund ARCM to sell $200m of Premier Oil debt[more]

    Third Point buys stakes in Facebook, Alibaba in Q2, exits Sony, Allergan Third Point LLC acquired new stakes in Facebook Inc. and Chinese e-commerce companies Alibaba Group Holding Ltd. and Inc. during the second quarter of 2020 as it divested positions in Sony Corp. and drugmaker

  3. PE/VC: Investors have bet big that you can get private equity returns in the public markets. A new study says otherwise, Aberdeen's Bonaccord teams up with CAZ to buy stakes in private markets managers, The role of private equity in economic recovery from Covid-19[more]

    Investors have bet big that you can get private equity returns in the public markets. A new study says otherwise From Institutional Investor: New research suggests private-equity-owned firms respond differently to financial distress - and that the resulting performance "cannot be replicat

  4. Opalesque TV: Meet a Swiss fund manager who hedges with a difference[more]

    B. G., Opalesque Geneva: There is a quant manager in Zurich that does things a little differently, which has helped a lot so far this year. ICON Asset Management, which was mentioned in the

  5. Franklin Templeton creates new unit with QS Investors[more]

    Laxman Pai, Opalesque Asia: Franklin Templeton will combine recently acquired QS Investors, a Legg Mason subsidiary, with Franklin Templeton Multiasset Solutions (FTMAS) business into a single consolidated unit. Effective Oct. 1, the combined business, called Franklin Templeton Investment Sol