Traders work on the floor of the New York Stock Exchange (NYSE) in New York.

Michael Nagle | Bloomberg | Getty Images

Strong, widespread gains in June catapulted hedge funds to their best start to a calendar year in a decade as equity bets, trend-following and activist strategies paid off.

Funds rose 5.7% in the six months through June 30, according to Hedge Fund Research Inc.’s asset-weighted index of managers; its fund-weighted index gained 7.6% over the same period. Breaking down the numbers, fund performance was led by equity hedging strategies, with year-to-date performance up 9.4%.

“Hedge funds posted broad-based gains to conclude the strongest first half of a calendar year, with varied and wide range of leadership including equity, technology, M&A-focused, trend-following, quantitative and blockchain/cryptocurrency exposures,” Kenneth Heinz, HFR’s president, wrote in a release.

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“It is likely that the W-shaped equity market pattern will continue throughout 2H19, with funds tactically positioned to benefit from opportunities presented leading industry performance and growth,” he added.

Hedge funds clinch best start since 2009 as equity bets pay off 1

Source: HFR

The stronger 2019 gains marked a sort-of rebound for the industry, which slumped through 2018’s market volatility and suffered its worst performance since 2011. Despite the hedge fund bounce in 2019, the S&P 500 is still well ahead with returns north of 19% including dividends.

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Activist hedge funds like Nelson Peltz’s Trian Fund Management and Bill Ackman’s Pershing Square Capital Management rose 11.4% as group in the first half of the year. Event-driven strategies — including activism — are up more than 6% this year. Ackman’s fund was up more than 45% in the first half.

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