Hedge fund managers recorded another positive month in July following strong H1 performance
The Eurekahedge Hedge Fund Index was up 0.69 per cent in July bringing their year-to-date return to 6.56 per cent as global equity markets edged higher following expectations over a Fed rate cut.
The MSCI ACWI (Local) was up 0.83 per cent in July and 15.33 per cent as of July 2019 year-to-date supported by the gains in developed market equities and bonds over the month.
The MSCI ACWI (Local) ended the month up 0.83 per cent with US equities outperforming other markets. On the other hand, the trade dispute between Japan and South Korea, together with lacklustre economic data in India pushed Asian equities lower. Returns were positive across geographic mandates in July, with North American fund managers gaining 0.31 per cent and Asia ex-Japan fund managers up 0.69 per cent. Fund managers utilising equity long-bias strategies gained 0.68 per cent throughout the month, pushing their year-to-date return to 11.72 per cent.
Roughly 67.9 per cent of the underlying constituents of the Eurekahedge Hedge Fund Index posted positive returns in July, and 27.1 per cent of the hedge fund managers in the database were able to maintain double-digit returns over the first seven months of 2019.
Hedge fund managers gained 0.69 per cent in July, bringing their year-to-date return to 6.56 per cent as global equity markets edged higher following expectations over a Fed rate cut. The MSCI ACWI (Local) was up 0.83 per cent in July and 15.33 per cent as of July 2019 year-to-date.
On an asset-weighted basis, hedge funds were up 0.84 per cent in July, as captured by the Mizuho Eurekahedge Hedge Fund Index (USD). The index was up 4.94 per cent over the first seven months of the year.
The Eurekahedge North American Hedge Fund Index gained 0.31 per cent during the month, as US equities reached record highs. North American fund managers utilising long/short equities strategy are up 10.41 per cent July 2019 year-to-date.
The Eurekahedge Greater China Long Short Equities Hedge Fund Index declined 0.62 per cent in July, weighed by the weak performance of the region's underlying equity market as investors were unnerved by the internal strife in Hong Kong. The mandate is still up 8.37 per cent year-to-date, owing to the strong Q1 performance of fund managers.
The Eurekahedge Fixed Income Hedge Fund Index was up 0.48 per cent in July, pushing its year-to-date return to 5.52 per cent. European government bonds were among the major performance contributors for fund managers in July, as they rallied on Lagarde's nomination as the ECB president. Over in the UK, Johnson's PM nomination led to weaker pound and lower Gilt yield towards the end of the month.
Fund managers utilising AI/machine learning strategies ended the month of July flat. The Eurekahedge AI Hedge Fund Index was up 0.01 per cent in July and 2.71 per cent year-to-date.
The Eurekahedge Crypto-Currency Hedge Fund Index was down 10.79 per cent in July, outperforming Bitcoin which declined 20.39 per cent over the month. Fund managers focusing on crypto-currencies are up 70.82 per cent over the first seven months of 2019, which compares to the 147.64 per cent year-to-date gain posted by Bitcoin.
North American fund managers were up 0.31 per cent in July, bringing their year-to-date return to 6.89 per cent. The region's equity market rallied on expectations of an impending Fed rate cut. Over in Asia, fund managers with Asia ex-Japan investment mandate ended the month up 0.69 per cent, bringing their year-to-date gain to 7.43 per cent despite the poor performance of the region's equities over the month. Weak economic data in China and India, together with the trade disputes between the US and China, as well as Japan and South Korea are likely to remain as key concerns for fund managers focusing on the region.
Returns were mostly positive across strategic mandates in July. Long-biased equity hedge funds gained 0.68 per cent during the month, maintaining their top spot in the strategy return map. All of the CBOE Eurekahedge volatility indices ended the month in the red, with tail risk fund managers posting the steepest losses of 4.42 per cent. Multi-strategy hedge funds returned 0.86 per cent in July, owing to the strong performance of developed market equities and corporate bonds.