The Hennessee Hedge Fund Index advanced 1.90 per cent in July, bringing its year-to-date performance to 1.87 per cent.
This follows a decline of 1.35 per cent in June 2010.
In July the S&P 500 increased 6.88 per cent (-1.21 per cent YTD), the Dow Jones Industrial Average climbed 7.08 per cent (+0.36 per cent), and the Nasdaq Composite Index advanced 6.90 per cent (-0.64 per cent YTD).
Bonds advanced, as the Barclays Aggregate Bond Index increased 1.07 per cent (+6.46 per cent YTD).
“Hedge fund managers lagged the broader markets due to defensive portfolio positioning. Managers began July with lower than average exposures after significantly reducing gross and net exposure levels during May and June. As a result, hedge funds lagged as equity markets rose sharply,” says Charles Gradante, co-founder of Hennessee Group. “On a positive note, we are encouraged to see that performance was partially driven by stock selection, rather than only directional market exposure. Stocks started to respond more to fundamentals as quarterly earnings were reported, a constructive development for hedge funds.”
