Hugh Hendry’s Bad Year Continues As Fund Down Nearly 10%

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Hugh Hendry’s streak of bad luck in his Eclectica hedge fund seems to be continuing. The Eclectica Absolute Macro Fund finished last month with a slight gain of 0.4%, bringing the YTD return to -8.9%, according to a letter to investors reviewed by ValueWalk. However, the fund is currently down 0.6% in July and negative 9.6% year to date. Below readers can find commentary from Hugh Hendry on the month ending June.

Also see Hugh Hendry December Letter: Last Bear Standing? Not Any More

Hugh Hendry’s CF Eclectica Absolute Macro Fund performance for the period ended June 30, 2014.

Hugh Hendry’s CF Eclectica Absolute Macro Fund Performance Summary

The Fund posted a gain of +0.4% for June during a relatively quiet month with no major moves.

Hugh Hendry monthly performance

The Long DM theme was the largest positive contributor (+0.4%) as the Fund saw gains from high growth focused companies across our internet, robots and biotech strategies. We subsequently took the opportunity to book profits after a strong run up from the April lows.

Hugh Hendry funds holdings

These gains outweighed modest losses incurred in Europe, where exposure to some of our higher beta equity positions has been reduced as we have started to see skeletons emerge from the closet in the run up to the implementation of the Asset Quality Review (AQR).

Hugh Hendry Absolute macro Asset allocation

Returns from our Short EM book were flat. There has been some rotation within the EM currency book as shorts were lifted on the Malaysian ringgit (where economic data is looking stronger) and the Indonesian rupiah (which had sold off to previous lows and was in our view vulnerable to a reversal in the event of a Jokowi election win).

Hugh Hendry Absolute macro top 10 strategies

The Japanese equity strategy gave back -0.2%. The Fund took some profits on holdings in brokers, which have rallied strongly from the lows, and the long Nikkei call spread position was closed out during the month, protecting the Fund from further losses as volatility continued to fall to levels comparable with European and US stocks.

Idiosyncratic trading strategies contributed +0.3%, as gains from our (options based) VIX short (since closed out) outweighed losses on US 30-year Treasuries.

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