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Vast majority of hedge funds see positive returns in August, India-focused funds lead the business

Monday, September 13, 2021
Opalesque Industry Update - The aggregate return for the global hedge fund business was +0.77% in August, a return to positive territory following a dip into the red in July, according to the just-released eVestment August hedge fund performance data.

The vast majority of mangers reporting to eVestment (67.4%) had positive returns last month, the best level in three months. August gains brought the year-to-date hedge fund industry aggregate return to +9.53%.

"August hedge fund performance was interesting for its relative low dispersion of returns," said eVestment Global Head of Research Peter Laurelli. "The average of the positive return during the month was not great, +1.97%, the second lowest level of 2021, but the average loss was not tremendous either at -1.79%. The differential between average gains and average losses is the narrowest in over two years, since July 2019."

Drilling down into primary hedge fund markets and strategies eVestment tracks, Laurelli notes that "Managed Futures funds are an area we're keeping an eye on as net asset flows to these funds have been surprisingly positive this year and resulting returns will most likely dictate if this positive theme continues. While average returns for Managed Futures funds of -0.31% in August may seem relatively poor, the largest managers performed very differently, returning an average gain of +0.93%. An average YTD return for the 10 largest reporting Managed Futures products of +11.49% for the year so far is the kind of positive news this segment needs."

• Funds focused on India continue to be among the strongest performers, with aggregate returns of +5.50% in August. These funds' +41.43% YTD returns have them leading the entire hedge fund business.

• While Event Driven - Activist fund aggregate returns in August were only +0.60%, these funds are another YTD performance winner, with aggregate returns for the year at +24.00%.

• Equity funds saw aggregate returns of +1.03% in August and are at +11.97% YTD. Looking at Equity fund sub-sectors eVestment tracks, Equity - Technology funds were performance winners among this group in August at +1.57% while Equity - Financials and Equity - Energy funds are YTD performance winners, with both posting aggregate returns for the year of nearly +19% (+18.83% and +18.69% YTD respectively).

• Among primary strategies eVestment tracks, Origination & Financing funds were among the biggest performance losers at -2.48% in August. These funds' performance is especially interesting given the overall positive return environment for the hedge fund business in August and so far this year. These funds are still positive YTD, however, at +4.74%.

• Hedge funds domiciled in Japan came on strong in August, returning +5.48%. Japan-domiciled funds are at only +2.87% for YTD returns. Hedge funds focused on Japan also saw strong returns in August, at +4.01%.

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