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Hedge fund managers up 1.82 per cent in June on the back of the US-China trade talk optimism

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The Eurekahedge Hedge Fund Index rallied 1.82 per cent in June, supported by the strong equity market performance on the back of optimism over the progress of US-China trade talk. 

Despite mixed economic data during the month, trade optimism and dovish central bank posturing saw the MSCI ACWI (Local) post gains of 5.41 per cent. Returns were positive across geographic mandates in June, with North American fund managers gaining 2.11 per cent and Asia ex-Japan fund managers up 2.18 per cent. Fund managers utilising equity long-bias strategies gained 3.06 per cent throughout the month, bringing their year-to-date return to 10.56 per cent.

Roughly 77.7 per cent of the underlying constituents in the Eurekahedge Hedge Fund Index posted positive returns in June, and 24.4 per cent of hedge fund managers in the database managed to maintain double-digit returns over the first half of 2019.

On an asset-weighted basis, hedge funds were up 1.94 per cent in June, as captured by the Mizuho Eurekahedge Hedge Fund Index (USD). The index was up 4.08 per cent year-to-date.

The Eurekahedge North American Hedge Fund Index gained 2.11 per cent during the month, as optimism over the US-China trade talk continuation and dovish Fed pushed US equities to record highs. North American fund managers utilising long/short equities strategy were up 2.59 per cent in June.

The Eurekahedge Greater China Hedge Fund Index gained 4.31 per cent in June, recording its strongest monthly return since January 2018. The index was down 5.95 per cent in May, following the re-escalation of the US-China tariff spat during the month.

The Eurekahedge CTA/Managed Futures Hedge Fund Index was up 2.44 per cent in June, pushing its year-to-date return to 4.36 per cent. Long positions in metals and oil were among the major performance contributors during the month. 

Fund managers utilising AI/machine learning strategies ended June up 5.65 per cent, recovering from the 3.79 per cent loss they suffered in May. On a year-to-date basis the Eurekahedge AI Hedge Fund Index was up 5.34 per cent.

The Eurekahedge Crypto-Currency Hedge Fund Index gained 13.85 per cent in June, recording its fifth consecutive positive month of the year. Crypto hedge fund managers benefited from the rally in crypto assets which saw Bitcoin breaching the US$12,000 level for the first time since the Q1 2018 crash. The index is up 100.59 per cent as of June 2019 year-to-date, which compares with a 1H gain of 211.06 per cent for bitcoin.

North American fund managers were up 2.11 per cent in June, bringing their year-to-date return to 7.26 per cent. The region’s equity and bond markets rallied on trade optimism and expectations of an impending Fed rate cut. Over in Asia, fund managers with Asia ex-Japan investment mandate ended the month up 2.18 per cent, bringing their year-to-date gain to 6.53 per cent. The development of the US-China trade conflict and economic growth will remain as key concerns for the region’s equity markets for the rest of the year. Fund managers focusing on Europe were up a modest 0.78 per cent in June, supported by the region’s strong equity market performance following expectations that further monetary policy easing may come from ECB.

Returns were mostly positive across strategic mandates in June. Long-biased equity hedge funds gained 3.06 per cent during the month on the back of the global equity market rally. Returns were mixed among the CBOE Eurekahedge Volatility Indexes, with tail risk and short volatility mandates posting gains. Long volatility and relative value volatility mandates were down 0.64 per cent and 0.14 per cent respectively in June. On a year-to-date basis, equity long-bias mandate maintained its place at the top of the strategy return map with 10.56 per cent gain over the first half of the year.

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