New data from Preqin suggests that stock-picking hedge funds are set to record their worst performance in 10 years, according to a report by Reuters, with cumulative returns having dropped 12.24% in the 12 months ending 31 July.
Year to date for 2022 the cumulative returns for stock-picking hedge funds are down 11.42%.
The report says that the growing risks of a global recession, rising interest rates, and soaring inflation have all combined to create an “uncertain market backdrop” with the S&P 500 stock index down 16% so far this year and heading for its worst annual performance since 2008.
Preqin’s data reveals that equity hedge funds have seen a 10% decline so far this year, while credit funds which trade bonds have fared better but are still down around 2%
Systematic equity hedge funds saw a negative 3.68% return cumulatively in the 12-months ending in July with actively managed bond funds and those managed systematically down 1.06% and 1% respectively for the same period.
Macro trading hedge funds by contrast, which buy and sell financial instruments based on the economic outlook, are having the strongest year so far, according to Preqin.
