Hedge Funds In The Red For The First Time In 2015 by Preqin

The Preqin All-Strategies Hedge Fund benchmark was down 0.75% in June 2015, ending its five month streak of positive performance.

Hedge Funds Q2 Performance

The hedge fund industry has posted average returns of -0.75% for June, the first month this year of negative performance. Despite this, the benchmark has still returned 4.50% year-to-date. Single-manager hedge funds were not the only fund structures which fared poorly in June; UCITS posted returns of -1.76%, and CTAs made losses of -2.66%, their worst monthly performance since July 2008. The only leading strategy with positive performance for the month was relative value, which posted a return of 0.17%. Relative value strategy funds have seen only two months of negative performance in the past 18 months.

Hedge Funds Q2 Performance

Other Key Hedge Funds Stats:

  • Both Asia-focused funds and Europe-focused funds saw negative performance of -1.82% and -1.06% respectively in June, in the wake of turbulence surrounding Chinese and Greek markets.
  • Despite their poor performance in the past month, Europe- and Asia-based funds accounted for more launches in Q2 (22% and 9% respectively) than in Q1, as North America-focused funds dropped to 67% of the market total.
  • Discretionary CTAs posted returns of -0.53%, compared to systematic CTAs which saw average returns of -3.56%. Despite this, CTAs as a whole are still holding on to positive performance for the year with 0.11%.
  • Funds of CTAs were hit especially badly with an average return of -6.95% for June and currently stand at -5.10% for 2015 YTD. Funds of hedge funds were down 1.22% in June 2015, but are up 2.93% for the year-to-date.
  • Alternative mutual funds have seen a notable decline in the proportion of fund launches they account for in the past six months. From a record high of 16% of total hedge fund launches in Q4 2014, they now represent only 3% of all launches in Q2 2015.
  • Credit strategies have fallen from 17% of launches in Q1, to 9% of launches in Q2, a figure similar to their market share in H2 2014. Conversely, relative value funds have more than doubled their proportion of launches to 12%, up from 5% in Q1.

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Hedge Funds Q2 Performance

To view the further information and analysis, please see the full report below:

https://www.preqin.com/docs/quarterly/hf/Preqin-Quarterly-Hedge-Fund-Update-Q2-2015.pdf

Comment:

“June has seen hedge funds post their first month of negative performance so far in 2015. The industry has had a run of five months of positive returns from the start of 2015, and surpassed full-year 2014 performance in May. However various macroeconomic events, notably the Greece/Eurozone crisis and the turbulence experienced in the China stock market, has led to hedge funds failing to generate positive returns in June and has dented the year-to-date return of the sector. CTAs have also suffered further following their strong returns in Q1 2015; a difficult Q2 has left the strategy only just clinging on to positive performance through the first half of the year.”

Amy Bensted – Head of Hedge Fund Products, Preqin