After 12 consecutive months of gains hedge funds lost 1.35 per cent in June, according to the Barclay Hedge Fund Index compiled by BarclayHedge.
The index remains up 4.26 per cent year to date.
“A comment by Fed chairman Ben Bernanke that the Fed may begin to taper its asset purchases caused interest rates to skyrocket while prices for equities, commodities, and emerging market currencies plummeted,” says Sol Waksman, founder and president of BarclayHedge.
Overall, 14 of Barclay’s 18 hedge fund strategies lost ground in June. The Barclay Emerging Markets Index dropped 3.97 per cent, Distressed Securities lost 2.00 per cent, Global Macro gave up 1.75 per cent, Fixed Income Arbitrage was down 1.28 per cent, and European Equities lost 1.21 per cent.
“Downward moves in currency prices and sharp increases in local interest rates hit Emerging Markets hard in June,” says Waksman.
On the positive side, the Barclay Technology Index gained 0.98 per cent in June, Equity Market Neutral was up 0.66 per cent, Equity Short Bias rose 0.61 per cent, and Convertible Arbitrage added 0.47 per cent.
The Barclay Fund of Funds Index lost 1.66 per cent in June, but is still up 3.08 per cent year to date.
After the first two quarters of 2013, the Pacific Rim Equities Index has gained 13.08 per cent, Healthcare & Biotechnology is up 10.60 per cent, the Equity Long Bias Index has gained 8.41 per cent, and Distressed Securities have returned 7.74 per cent.
Equity Short Bias has lost 15.80 per cent year to date. Emerging Markets slipped into negative territory in June, and is down 0.40 per cent for the year. All other hedge fund strategies tracked by BarclayHedge are all in positive territory for 2013.
