The hedge fund industry tallied its 9th straight month of gains in July with an overall return of 0.07%, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions. By comparison, the S&P 500 Total Return Index gained 2.38% in July. For the year to date interval, the Barclay Hedge Fund Index was up 8.95% as of the close of July versus 17.99% for the S&P 500 Total Return Index.
The Hedge fund subsectors’ performance on the month was a truly mixed bag, with half gaining and half losing ground. Leading the sectors in positive territory for the month was the Emerging Markets Sub Saharan Africa Index, returning 2.20%, followed by the European Equities Index (1.72%), Equity Market Neutral Index (1.33%), the Option Strategies Index (1.30%), and the Technology Index (1.12%).
Among the subsectors in the red for July, losses were greatest in the Emerging Markets Latin American Equities Index, down -7.47%, the Emerging Markets Latin America Index (-4.57%), the Healthcare & Biotechnology Index (-4.37%), the Emerging Markets Global Equities Index (-4.11%), the Emerging Markets Global Index (-2.79%), the Emerging Markets Asian Equities Index (-2.62%), and the Emerging Markets Index (-1.70%).
Despite the month’s hemorrhages, all but two hedge fund subsectors remained in the black for the year so far in 2021. The Emerging Markets Eastern European Equities Index lead the grid with a 21.01% year to date return through July. Other notable sectors on the upside were the Emerging Markets Eastern Europe Index (17.30%), the Distressed Securities Index (16.41%), the Equity Long Bias Index (15.18%), the Emerging Markets MENA Index (13.66%), the Technology Index (12.73%) and the European Equities Index up 12.43%.
The Emerging Markets Latin American Equities Index is off -3.69% on the year so far, and the Emerging Markets Latin America Index is down -0.36%.
“Markets felt caught between competing and opposed narratives in July, resulting in a mixed bag of results that skewed negatively,” observed Ben Crawford, Head of Research at BarclayHedge. “On the one hand, concerns over the spread of the COVID-19 Delta variant became far more salient, and worries over a stubborn spike in inflation showed up in declining U.S. consumer sentiment. These worrying developments generated clear dissonance with previous months’ outlooks. On the other hand, macroeconomic forecasts remained relatively buoyant amid indicators that signaled continuing economic improvement, including record U.S. job creation statistics.”
For a complete table of BarclayHedge Hedge Fund and Sub-Index results for July, as well as historical returns, click here.
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BarclayHedge, a division of Backstop, currently maintains data on more than 6,900 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.