Hedge Funds Eke Out Eighth Positive Month in June

Emerging markets, activists funds post strong gains, while managed futures and large funds struggled.

Hedge funds edged up 0.13% in June to post their eighth straight months of gains, according to research by eVestment. The industry posted gains of 0.84% for Q2, and 3.26% YTD.

The positive performance comes as investors have been reinvesting in the asset class after steep withdrawals in the prior year, amid some signs of relief for the industry.

Buoyed by strong international markets and investor risk appetite, emerging market hedge funds were among the strongest performers.

China funds gained 4.37% in June to post 17.01% gains YTD.  Africa/Middle East- and Asia-focused funds both performed strongly in June as well, gaining 3.58% and 2.10%, respectively. Funds focused on those regions are up more than 10% YTD. India-focused funds gained 1.54% for June, bringing YTD gains to 19.88%.

Brazil-focused funds lost 1.5% in June, but are up 4.76% YTD. Russia-focused funds, however, are negative for the year. They lost 1.5% in June and are down 0.7% YTD.

Activist funds were also strong performers, with gains of 1.45% for June and 5.25% YTD. Long/short equity funds gained 1.02% for June, for 5.62% gains YTD.

Managed futures funds were the weakest performers for both June and YTD, posting losses of 2.06% and 2.3%, respectively. The 10 largest hedge funds lost 1.12% in June, bringing YTD gains to .22%.

While being one of the few categories to see inflows in 2016, commodities-focused funds continued to struggle. They lost .76% in June for losses of 4.06% YTD. “As one of the only segments of the industry to see aggregate net inflows in 2016, recent commodity fund performance continues to be disappointing,” the report noted.

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