Despite Turbulence, Hedge Funds Achieve Q2 Gains

Hedge Funds Up Amid Volatile Markets.  

Hedge funds were up nearly two percent in the month of June.  This means that the industry faced its third monthly gain in a row.  Although the industry aggregate  — as measured by the HFRI Fund Weighted Composite Index — is still down, hedge funds are doing well considering the market circumstances.  Following the economic downturn from the coronavirus pandemic, hedge funds have seen a nine percent recovery in the second quarter.  Success within the industry is scattered, and funds that prevailed through market turbulence in H1 will likely follow a similar trend in the second half.  As stated by HFR president Kenneth Heinz, “Despite the strong Q2 recovery, risks and realised volatility associated with additional virus contagion, social unrest, and the upcoming US election remain elevated.”  Still, all these factors are making the hedge fund industry look dominant.  For instance, equity-focused hedge funds were up three percent in June, yielding a 13.6 percent return in the second quarter.  

Healthcare and Tech

Specific sectors within the industry are particularly successful.  Healthcare and technology equity-focused funds seem immune to market volatility.  Technology funds saw a 17 percent increase in quarter two while healthcare stock were up nearly four percent in the second half.  Additionally, event-driven investors grew 2.54 percent in performance with a 9.57 percent performance in the second quarter.  Event-driven funds also attributed a 1.42 percent increase in June to activist managers.  Better yet, multi-strategy event investors are up 7.64 percent YTD with a 12 percent rise in June.  Further, credit arbitrage funds performed with a 4.3 percent increase in June.

Looking Forward

On the micro-level, hedge funds are doing great; however, the technology and healthcare funds are doing even better.  Investors should still caution on the industry due to heavily uncertain factors in the future.  The macro level is still on the down side for the hedge fund industry.  For instance, credit arbitrage funds are down by about eight percent, year-to-date.  Ultimately, hopes should not be too high.  

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Latest Alternative Investment News
Liquid Alternatives: Watch Out For These “Potholes” (Goldman Sachs)
October 21, 2020     Liquid Alternatives, News

Theodore Enders, Global Head of Goldman Sachs Asset Management (GSAM) Strategic Advisory Solutions, says that investors are sometimes disillusioned with their investments in alternatives. However, on closer analysis, it turns…
Digital Assets: Sovereign Wealth Funds The Unseen Gorilla In The Bitcoin Room
October 21, 2020     Digital Assets, News

There has been a remarkable change in recent months in the perception of bitcoin as an investible asset. Large, listed companies have parked sizable chunks of their cash reserves in…
FinTech: Digitization And Fintechs Make Inroads Into Asia’s Retirement Funds
October 21, 2020     FinTech, News

A report from Cerulli Associates shows that retirement funds in Asia are upping their game in a drive to become more transparent, streamline their administrative processes, and give fund members…
Venture Capital: Kalanick, of Uber Fame, Buys $130M of Real Estate For CloudKitchens Startup
October 21, 2020     News, Venture Capital

You could call it providential timing, but Kalanick’s CloudKitchens startup received a huge boost from the Covid-19 pandemic. With restaurants out of business, or temporarily shuttered, shelter in place diners…