Singapore Hedge Fund

Alternative asset management in Singapore

Most hedge funds failed to make money in June

From Reuters, Singapore.  Most strategies employed by hedge fund managers globally failed to generate positive returns in June as stock markets moved sideways and commodity prices slid during the month, according to estimates from Lipper on Tuesday.

The best-performing hedge fund strategy was “convertible arbitrage” which returned 0.28 percent, while the worst-performing strategy was “managed futures” which lost 1.59 percent. Long/short equity hedge funds declined 0.23 percent.

Overall, nine of the 13 strategies tracked by Lipper lost money last month.

“Managed futures managers were hit in June by the lack of a clear trend as intra-month volatility spikes resumed across a number of asset classes,” Lipper’s global head of hedge fund research Aureliano Gentilini said in a report.

Commodity prices fell in June, with the Reuters/Jefferies CRB Index .CRB declining 1.22 percent, as gains in industrial metals and energy were offset by losses in agricultural, soft commodities and precious metals, said Lipper, a unit of Thomson Reuters.

Hedge fund managers have come under increased scrutiny since last year due to their failure to generate positive returns in bear markets as they are supposed to, resulting in outflows from the industry. Many observers say, however, that withdrawals are easing and managers could see inflows before the end of 2009.

Strategies used by managers include arbitrage, which typically involves exploiting different valuations of what is essentially the same underlying security such as the price of a stock and its price in the forward market.

Managed futures traders, on the other hand, focus on trading futures contracts in areas such as metals, grains, stocks and currencies.

Reuters

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