The Barclay/GHS Hedge Fund Index is up 2.24 per cent in July, and Barclay's Fund of Funds Index gained 1.53 per cent.

Managed futures did not fare as well, as the Barclay CTA Index dropped 0.53 per cent. The Barclay BTOP50 Index, which measures the performance of the largest traders, lost 0.17 per cent in July.

"Year to date, hedge funds have gained 4.33 per cent, and fund of funds are up 2.32 per cent." said Sol Waksman, president of The Barclay Group. "Even though these returns are lower than some investors' expectations, let's not forget that they're nearly double what we saw last year at this time, and 2004 was a decent year both on an absolute and a relative basis."

Overall, 17 of the 18 hedge fund strategies tracked by Barclay were profitable in July. Equity Long Bias gained 3.41 per cent, the Technology Index rose 3.12 per cent, while Healthcare and Biotechnology was up 3.10 per cent. Only Equity Short Bias was down, losing 1.65 per cent.

In managed futures, five of the six Barclay CTA indices were down. Financials and Metals Traders lost 2.01 per cent, erasing June gains. Discretionary Traders lost 0.66 per cent, and Systematic Traders slid 0.38 per cent. The Agricultural Traders Index held on to a 0.01 per cent gain.