While hedge fund performance was positive in August, a deeper dive into the new eVestment August 2014 Hedge Fund Performance Report highlights a mixed bag of results, with several sectors' strong performance propping up some weaker segments.
Some key points from the report, according to report author Peter Laurelli, eVestment's vice president of research, include:
- Hedge fund performance was positive in August, but it appears that reduced market exposures following July’s volatility resulted in the industry not fully benefiting from August’s equity market rally. Entering August, the average gross market exposure across the industry was lower than at any point in the last two years.
- Macro and managed futures strategies enjoyed the limelight in August producing industry leading performance during a positive month for the first time since April 2013.
- Activist strategies’ gains supported event driven fund returns in August. Activist hedge funds are again the industry’s best performing major strategy in 2014 after enduring July’s volatility.
- Brazil funds (up 4.85% in August) and India funds (up 2.34% in August) led returns in emerging market funds, while Russia and Eastern Europe funds (down 1.01% and 2.72% respectively in August) were part of a mixed bag of Emerging Market funds performance in the past month.
- Credit strategies posted an aggregate decline for the second consecutive month for the first time since the height of the European sovereign debt crisis in 2011. Losses were concentrated among funds with high yield, Europe and/or MBS-related market exposures.
- Despite volatile commodity prices, funds operating in physical commodity markets were positive in August and are behind only funds operating in equity and broad corporate capital structure markets in 2014.