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Hedge funds report sixth month of gains for 2019 in July

Friday, August 16, 2019
Opalesque Industry Update - Hedge funds had another positive month in July, returning 0.44% according to the Barclay Hedge Fund Index, compiled by BarclayHedge, a division of Backstop Solutions. By comparison, the S&P Total Return Index was up 0.66% in July.

Hedge funds continue to build on their solid performance in the first half of the year, finishing July with a 7.68% year-to-date return and positive returns in six of the past seven months. The S&P Total Return Index was up 21.69% year-to-date through July 31.

"Anticipation of the first interest rate cut by the Fed in more than ten years propelled the S&P 500 and the Nasdaq to all-time highs in July," said Sol Waksman, president of BarclayHedge. "Concerns over the economic implications of a no-deal Brexit and slowing growth in Europe helped push German 10-year bond yields to new lows. The equity and interest rate sectors provided enough of a tailwind for a positive month."

July's leaders included the Emerging Markets Latin America Index, up 3.03% for the month, the Emerging Markets Latin American Equities Index, with a 2.94% return, and the Option Strategies Index gaining 2.18%.

While the hedge fund industry posted positive results in July, there were five sectors among those tracked by BarclayHedge that were in negative territory for the month. Among sectors in the red for July, the Healthcare & Biotechnology Index saw the biggest drop with a 2.86% decline. The Emerging Markets Asian Equities Index was down 1.07% in July.

"Lawsuits targeting opioid producers and concerns over high drug prices in the US have been having a negative impact on the equity prices of firms in the healthcare sector," said Waksman. "Additionally, fears of an escalating US-China trade war coupled with the impact of an already-slowing Chinese economy put a damper on Asian equity markets."

All sectors but two were in positive territory year-to-date through July. The Volatility Trading Index was down 0.97% for the year and the Equity Market Neutral Index off 0.35% year-to-date.

Leading the year-to-date gainers was the Emerging Markets Eastern European Equities Index, up 18.56% for the year. Other double-digit year-to-date gainers include the Emerging Markets Eastern Europe Index, gaining 18.21% for the year, the Emerging Markets Latin America Index, posting a 14.63% gain through July 31, and the Emerging Markets Latin American Equities Index, up 14.59% so far in 2019.

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