After returning a healthy 9.5% through the first half of 2009, the composite Eurekahedge Hedge Fund Index rose 2.2%1 in July, with returns for the first seven months of the year adding up to 12% - the best year-to-July returns on record for the Index.
The month’s gains were delivered on the back of a strong rally across equity markets during the latter half of the month, with the MSCI AC World Index up 8.7%, as better than expected Q2 corporate earnings reports and positive macroeconomic data emanating from the US helped keep risk appetites strong. Gains were also realised from bets in the convertibles and high yield markets, which had yet another strong month in July.
In terms of regional performance, Asia ex-Japan focused managers fared the best, returning an impressive 6% in July benefiting largely from rallying stocks in markets like Hong Kong, China, Taiwan, Australia and India, among others, all of which returned over 7% during the month.
Japanese managers, on the other hand, turned in the least returns averaging 0.6% as weak economic data emanating from the country’s economy resulted in relative underperformance of domestic equity markets; the Topix rose a relatively modest 2.2% in July.
All other geographical mandates were up between 2% and 3% during the month, with long/short equity and event driven funds being the main drivers of performance.
Eurekahedge Performance Indices - Regions
In terms of strategic mandates...
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1Based on 66% of the funds reporting their July 2009 returns as at 17 August 2009.