Hedge funds gained 0.85 per cent in July, according to the Barclay Hedge Fund Index compiled by BarclayHedge.

The index is up 3.19 per cent year to date.

“Equity markets see-sawed in July, driven up and down by economic reports in the most recent news cycle,” says Sol Waksman, founder and president of BarclayHedge. “Poor economic data drove markets down, and hopes of action by governments and central banks rallied the markets. It was a very difficult trading environment for many strategies.”

In July, 17 of Barclay’s 18 hedge fund indices had positive returns. The Barclay Equity Short Bias Index rebounded with a 3.16 per cent gain, global macro added 1.56 per cent, the Event Driven Index gained 1.54 per cent, distressed securities were up 1.41 per cent, and the Multi Strategy Index rose 1.12 per cent.

“When the dust settled at month’s end, prices for equities, bonds and commodities were mostly higher,” says Waksman.

The only losing hedge fund strategy in July was the Pacific Rim Equities Index, which slid 0.04 per cent.

Year to date, the Healthcare & Biotechnology Index leads all hedge fund strategies with a 9.14 per cent gain. Convertible arbitrage is up 6.06 per cent, and fixed income arbitrage has gained 5.25 per cent.

Equity short bias is the only hedge fund strategy with a loss in 2012. At the end of July, equity short bias was down 7.33 per cent for the year.

The Barclay Fund of Funds Index gained 0.67 per cent in July, and is up 1.66 per cent in 2012.