Hedge funds gained 2.15 per cent in July, according to the Barclay Hedge Fund Index compiled by BarclayHedge.
The index is up 2.2 per cent year-to-date.
All but one of Barclay’s 18 hedge fund indexes had a positive return in July.
The Barclay Emerging Markets Index surged 3.54 per cent, equity long bias jumped 3.03 per cent, the technology index gained 2.61 per cent, multi-strategy was up 2.26 per cent, and fixed income arbitrage rose 2.03 per cent.
“All of the winds were blowing in the right direction in July,” says Sol Waksman, founder and president of BarclayHedge. “Equity markets rallied on the back of strong earnings and bond prices rose as inflation fears subsided.”
The Emerging Markets Index rebounded from losses of 5.48 per cent in May and 0.22 per cent in June, and is now up 2.73 per cent in 2010.
“Based on the July returns to MSCI indices, emerging market equities in the Far East gained 5.86 per cent, Latin America rose 11.85 per cent, and Eastern Europe increased by 12.70 per cent,” says Waksman.
“Although equity-based hedge funds had a good month in July, as a group they underperformed the equity indices. Since hedge funds have both long and short exposures in their portfolios, it’s not uncommon for them to underperform when equities rally strongly.”
The only losing strategy in July was the Equity Short Bias Index, which fell 2.89 per cent. Equity short bias has been volatile in 2010, with three months of strong gains versus four months of equally severe losses. Each month has seen a loss or gain ranging between 2.40 per cent and 5.85 per cent.
The Barclay Fund of Funds Index gained 0.76 per cent in July, but remains down 0.68 per cent year-to-date.
