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Hedge funds post 0.44 per cent monthly return in July, says Backstop BarclayHedge

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Hedge funds had another positive month in July, returning 0.44 per cent according to the Barclay Hedge Fund Index, compiled by BarclayHedge. By comparison, the S&P Total Return Index was up 0.66 per cent in July.

Hedge funds continue to build on their solid performance in the first half of the year, finishing July with a 7.68 per cent year-to-date return and positive returns in six of the past seven months. The S&P Total Return Index was up 21.69 per cent year-to-date through 31 July.

“Anticipation of the first interest rate cut by the Fed in more than ten years propelled the S&P 500 and the Nasdaq to all-time highs in July,” says Sol Waksman (pictured), president of BarclayHedge. “Concerns over the economic implications of a no-deal Brexit and slowing growth in Europe helped push German 10-year bond yields to new lows. The equity and interest rate sectors provided enough of a tailwind for a positive month.”

July’s leaders included the Emerging Markets Latin America Index, up 3.03 per cent for the month, the Emerging Markets Latin American Equities Index, with a 2.94 per cent return, and the Option Strategies Index gaining 2.18 per cent.

While the hedge fund industry posted positive results in July, there were five sectors among those tracked by BarclayHedge that were in negative territory for the month. Among sectors in the red for July, the Healthcare & Biotechnology Index saw the biggest drop with a 2.86 per cent decline. The Emerging Markets Asian Equities Index was down 1.07 per cent in July.

“Lawsuits targeting opioid producers and concerns over high drug prices in the US have been having a negative impact on the equity prices of firms in the healthcare sector,” said Waksman. “Additionally, fears of an escalating US-China trade war coupled with the impact of an already-slowing Chinese economy put a damper on Asian equity markets.”

All sectors but two were in positive territory year-to-date through July. The Volatility Trading Index was down 0.97 per cent for the year and the Equity Market Neutral Index off 0.35 per cent year-to-date.

Leading the year-to-date gainers was the Emerging Markets Eastern European Equities Index, up 18.56 per cent for the year. Other double-digit year-to-date gainers include the Emerging Markets Eastern Europe Index, gaining 18.21 per cent for the year, the Emerging Markets Latin America Index, posting a 14.63 per cent gain through July 31, and the Emerging Markets Latin American Equities Index, up 14.59 per cent so far in 2019.

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