The global hedge fund business returned 0.18% in June, bringing year-to-date (YTD) performance for the industry to 9.22%, the best first-half performance since 2009, according to data from institutional investment data and analytics provider eVestment.
“This year’s performance is impressive by an even longer measure, as in the last 20 years H1 returns have only been near or better than 2021’s three other times, in 2000, 2003 and 2009,” says eVestment global head of research Peter Laurelli.
Hedge fund performance in June continued a streak of good news for the industry, which returned 11.04% in all of 2020. But while 58% of funds reporting to eVestment were in the green in June, that marked the lowest proportion of positive results in a month since October of 2020.
India-focused hedge funds are leading the industry in YTD returns, with average returns at 28.44%. These funds saw average returns in June of 3.77%.
Among the primary hedge fund types eVestment tracks, FX-currency funds were big performance winners in June, returning an average of 1.45%. These funds have had a tougher year than most, however, and are still negative for the first half of the year with average performance at minus 0.69%. Commodities-focused hedge funds saw average returns of 0.68% in June and have YTD average returns of 15.22%, among the strongest H1 2021 average returns among all the hedge fund types and strategies eVestment tracks.
In June, origination & financing hedge funds were the strongest performers among the primary strategies eVestment tracks, with average returns of 2.42%. For the year, these funds are beating the industry aggregate return at 9.53%.
Equity-focused hedge funds are also among the strongest performers so far this year. These funds returned an average of 0.63% in June and are sitting at 12.16% for the year. Among equity hedge fund sub-types, equity-technology funds returned an average of 2.63% in June and are seeing YTD average returns of 8.09%.
Equity-energy funds also fared well in June, returning an average of 1.65%. With YTD average returns of 16.90%, equity-energy funds are among the strongest performers this year.
The 10 largest reporting managers continue to produce mixed results, with minus 0.69% average returns in June and YTD average returns of just 2.89%, which are significantly lower than the industry’s average.
“This is more due to a broad discrepancy between some good, some bad and some in-between returns among these very large funds rather than the result of large funds generally underperforming,” Laurelli says. “Though we are not seeing these same discrepancies across the entire industry, keeping those returns down.”