Hedge fund performance drops

Date: Wednesday, July 12, 2006
Author: Advisor.ca

Global equity markets were down last month and hedge fund returns followed suit, dropping for the second month in a row in June. Performance measured by the Barclay Hedge Fund Index shows a slide of 0.32% during the month, following a 1.82% drop in May.

"Directional equity strategies were the hardest hit," says Sol Waksman, founder and president of the Barclay Group. "But we would expect equity short bias and most arbitrage strategies did well."

Although the losses were less widespread during the month — 60% of funds reported losses in June, down from 70% in May — 13 of Barclay's 18 hedge fund indexes lost money. The Emerging Markets Index dropped 1.16%, Equity Long Bias fell 0.96% and Technology fell 0.81%. Equity Market Neutral fund gained 1.19% in June, Equity Short Bias rose 0.92% and the Merger Arbitrage Index gained 0.67%.

The company says despite two months of losses, the Barclay Hedge Fund Index is still up 5.72% for the first six months of the year. The strongest performing sectors year to date include the Merger Arbitrage Index, up 7.92%, Event Driven, up 7.84% and Multi-Strategy funds, up 7.32%. The weakest performer year to date is the Pacific Rim Equities Index, which lost 1.72%.