Stocks Propel Hedge Funds to the Best First Half in a Decade

September 16, 2019 | Hedge Funds

The Fed’s reversal on interest rates lit up stocks

Hedge fund returns improved dramatically in the first half of the year. According to Hedge Fund Research, funds gained 5.7% during the six months ended in June 2019.

However, given that the S&P500 zoomed nearly 19% in the same period, those returns are tame in comparison. Naturally, equity funds were the best performers – up nearly 9%.

Still, no complaints. Recall that in 2018, the industry posted its worst performance since 2011.

Hedge fund returns – the big winners

Activist hedge funds, a subset of the event-driven managers’ category, rose 11.4%. However, event-driven as a category gained 6.6%.

Among star fund managers, Bill Ackman hit it out of the park with a gain of 45%. David Einhorn also shone brightly – up 18%. Brevan Howard Asset Management’ Master Fund rose 9.3% in the same period, its best first half since 2009.

“Global macro has come back to life very quietly,” said Rob Christian, head of investment research at K2 Advisors.

With that said, hedge funds had a weak month in August. According to eVestment, aggregate monthly performance for the sector fell by 0.31% in August. That was the second negative monthly return for the year.

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