Hedge fund industry gains 2.04 per cent in June, saysBackstop BarclayHedge

Hedge funds continued their positive ways in June, riding a continuing stock market recovery and reopening economies to a 2.04 per cent monthly return, according to the Barclay Hedge Fund Index, compiled by BarclayHedge, a division of Backstop Solutions. 

By comparison, the S&P 500 Total Return Index was up 1.99 per cent in June.

Year-to-date, the hedge fund industry was down 2.71 per cent. The S&P 500 Total Return Index was down 3.08 per cent over the same period.

All sectors but one tracked by the Barclay Hedge Fund Indices were in the black for June. The lone exception was the Volatility Trading Index, which was down 1.23 per cent for the month.

In spite of continuing bad news regarding the COVID-19 pandemic, there were encouraging economic signs in June. Businesses began to reopen and there were indications that the pandemic’s economic impact might have done its worst. The economy was beginning to turn upward.

“Although pandemic concerns remained, stock markets experienced their best quarter in more than 20 years, significantly recovering their pandemic losses,” says Sol Waksman, president of BarclayHedge. “Businesses continued to reopen slowly and US retail sales jumped prompting optimism that the COVID recession might be short-lived.”

As China reopened, the country’s economic activity accelerated. Other Asian economies followed suit. The Emerging Markets Global Equities Index led the pack in June with a 5.65 per cent return. Several other emerging markets indices were among June’s leading gainers, including the Emerging Markets Asian Equities Index, advancing 5.53 per cent and the Emerging Markets Latin American Equities Index, gaining 4.81 per cent.

Other notable gains were seen in the Technology Index, up 4.74 per cent and the Emerging Markets Index, gaining 4.37 per cent.

Although most hedge fund sectors remained in the red for the year-to-date through June, 8 posted gains. Leading the gainers were the Technology Index, up 9.75 per cent, the Volatility Trading Index, gaining 8.71 per cent, the Emerging Markets Global Fixed Income Index, posting an 8.19 per cent return, and the Healthcare & Biotechnology Index, up 5.37 per cent.

The Emerging Markets Latin American Equities Index posted the largest year-to-date percentage drop through June, down 18.22 per cent. The Emerging Markets MENA Index was off 12.14 per cent through June, the Emerging Markets Global Equities Index was down 10.18 per cent, the Emerging Markets Eastern European Equities Index dropped 9.57 per cent, and the Pacific Rim Equities Index was down 9.51 per cent.