eVestment: Hedge Funds Gain For Ninth Straight Month In July

Aug 10 2017 | 10:26pm ET

Hedge funds booked their ninth consecutive month in the green last month and turned in their most broadly positive month since July of last year, according to new research from eVestment. 

The company’s widely followed Hedge Fund Aggregate benchmark rose +1.21% in July 2017, bringing the measure’s year-to-date tally to +4.77%. Importantly, three quarters of strategies tracked by the company are in positive territory, eVestment said. 

The last two times the industry produced a higher proportion of funds in the black during a month, the difference between average gain and average loss was much greater than July 2017’s reading, eVestment continued. In other words, not only were most funds up in July, but even the ones that weren’t up were not very wrong. 

The findings were published in the July 2017 eVestment Hedge Fund Performance Report. Key highlights:

  • Event Driven-Activist funds were top performers among primary strategies, returning +1.67% in July and bringing YTD returns to a healthy +7.29%.
  • Among primary markets, Equity-focused funds were also strong performers, returning +1.66% in July and +7.28% YTD. 84% of both Credit and L/S Equity managers are up YTD, but the average gain from long/short equity has been nearly twice that of credit. 
  • Managed futures funds gained +0.86%. In the last two years, 54% of monthly returns from managed futures strategies were negative, for an aggregate -2.13% return. Yet investors have allocated $15.6 billion into the strategy over the same time span. The takeaway, eVestment notes, is that CTAs need more months like July. 
  • FX/currency funds were down -0.53% in July, and funds with primary strategies in the Origination & Financing space were down -0.16% for the month. These were the only two primary strategies in the red during the month. 
  • Emerging market outperformance continued in July. India-focused funds lead in returns, putting up +4.96% in July and bringing YTD returns to +24.90%. China-focused funds were also leaders, returning +4.84% in July, for YTD returns of +21.43%, while Brazil-focused funds returned +7.32% in July to bring 2017 returns so far up to +11.21%. 

Atlanta-based eVestment was founded in 2000 by Jim Minnick, Matt Crisp and Heath Wilson. The company boasts one of the largest, most comprehensive global databases of traditional and alternative strategies and provides institutional investment data intelligence and analytic solutions to clients worldwide.

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