Published by Investment Week – 18th July 2017
The global hedge fund industry averaged positive returns for each of the first six months of the year for the first time since 2007, according to data provider Preqin.
Hedge funds returned 0.57% in June, bringing year-to-date gains to 4.87%, the highest H1 performance the industry has seen since the first half of 2009, when it achieved returns of 16.94%.
June was also the sector’s eighth consecutive month of gains overall, surpassing the seven-month period recorded in March to September 2016.
“Despite negative investor sentiment at the start of the year, over the past six months the hedge fund industry has recorded one of its strongest H1 performance periods since the global financial crisis,” said Amy Bensted, head of hedge fund products at Preqin.
“Although we have not seen large monthly gains, consistent performance has bolstered the asset class’ returns, and 12-month performance is now in double digits.”
At 0.91%, equity strategies recorded the highest returns for the month, taking 12-month performance to 13.62%.
These were followed by multi-strategy and event-driven funds, which saw returns of 0.51% and 0.48% respectively.
By contrast, systematic ‘CTA’ strategies declined by 1.04% during June, with Europe-focussed funds were the worst performers after losses of 2.61%.
June was the worst month for CTAs since October 2016 and drags 2017 performance into the red, with losses of 0.57% year-to-date and 2.64% over the last 12 months.
“Despite growing interest from hedge funds in AI and machine learning technology, the gap between the performance of discretionary and systematic funds continues to widen,” said Bensted.
“Over the past 12 months, discretionary funds have now made twice the gains seen by systematic vehicles.
“Continued investment themes globally – including a more hawkish attitude from central banks, as well as more settled markets in Europe and Asia – have allowed discretionary fund managers to pull ahead of their systematic counterparts.”
