As Wall Street experienced its best August since the 1980s, the hedge fund industry posted its fifth straight positive month returning 2.42% in August, according to the Barclay Hedge Fund Index, compiled by BarclayHedge, a division of Backstop Solutions. By comparison, the S&P 500 Total Return Index was up 7.19% in August.
For the year-to-date, the hedge fund industry added to its gains in August, returning 2.40% for 2020. The S&P Total Return Index returned 9.74% over the same period.
All but three hedge fund sectors tracked by the Barclay Hedge Fund Indices were in the black for August.
“The COVID-19 pandemic remained a very real factor for businesses, economies and societies in August, but investors continued to see significant causes for optimism,” said Sol Waksman, president of BarclayHedge. “Stock markets posted record results as U.S. durable goods orders exceeded expectations, home sales surged and consumer spending continued to increase, with markets responding accordingly.”
In August, the Pacific Rim Equities Index led the way among hedge fund sectors with a 4.60% return. The Emerging Markets Asian Equities Index returned 4.35%, the Emerging Markets Asia Index and Emerging Markets Global Equities Index each produced a 3.76% yield, the Healthcare & Biotechnology Index was up 3.72% and the Emerging Markets Eastern European Equities Index posted a 3.35% return.
The few sectors in the red in August included the Emerging Markets Latin American Equities Index, down 2.32%, and the Emerging Markets Latin America Index, off 1.26%, as Latin American economies and corporates continued to be particularly stressed by the COVID-19 pandemic. The third sector in negative territory for August was the Equity Market Neutral Index, off 0.72% for the month.
For the year-to-date, hedge fund sectors were split in August between those in the black and those in the red. Leading gainers for the year included the Technology Index, up 15.74%, the Volatility Trading Index, gaining 12.15%, the Emerging Markets Asian Equities Index, returning 10.04% on the year, the Healthcare & Biotechnology Index, up 9.90%, and the Fixed Income Arbitrage Index, gaining 8.52%.
Among the sectors in the red for the year were the Emerging Markets Latin American Equities Index, down 13.67%, the Emerging Markets MENA Index, losing 5.91%, the Emerging Markets Eastern European Equities Index, slipping 5.00%, the Emerging Markets Global Equities Index, off 3.63% and the Pacific Rim Equities Index, down 3.45%.
For a complete table of BarclayHedge Hedge Fund and Sub-Index results for August, as well as historical returns, click here.
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Backstop’s mission is to help the institutional investment industry use time to its fullest potential. We develop technology to simplify and streamline otherwise time-consuming tasks and processes, enabling our clients to quickly and easily access, share and manage the knowledge that’s critical to their day-to-day business success. Backstop provides its industry-leading cloud-based productivity suite to investment consultants, pensions, funds of funds, family offices, endowments, foundations, private equity, hedge funds and real estate investment firms.
BarclayHedge, a division of Backstop, currently maintains data on more than 7,100 hedge funds, funds of funds and CTAs. The BarclayHedge Indices are utilized by institutional investors, brokerage firms and private banks worldwide as performance benchmarks for the hedge fund and managed futures industries.
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