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Portfolio > Alternative Investments > Hedge Funds

MSCI Hedge Fund Index Returns Hurt by Directional

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NEW YORK (–Hedge funds reported lukewarm preliminary June performance of 0.5%, according to the MSCI Hedge Fund Composite Index.

Returns were dragged down by global macro and futures funds, which together with other directional funds declined 2%, according to the MSCI Directional Trading Index.

Year-to-date, though, hedge funds still look good with returns of 8%, according to the MSCI Composite. And MSCI’s Directional Trading Index still is up 8.3% for the year relying on revised performance for May, which fell to 5.1% from the preliminary result of 5.2% Previous HedgeWorld Story.

In June, the big performance winners were the MSCI Specialist Credit Index, which has distressed funds, long/short credit funds, and private placement funds, and the MSCI Multi-Process category, which contains event-driven funds. Both of those categories returned 1.7% in June, according to preliminary data.

Year-to-date, the MSCI Specialist Credit Index returned 8.4%, using May returns that were revised slightly to 4.2% from 4.3%. The MSCI Multi-Process Index returned 10.3% year-to-date through June, using a May performance number that was revised upward to 3.7% from 3.5%.

The MSCI Security Selection Index, which contains long/short equity, market neutral, and short funds did well in June with a preliminary return of 1.4%, bringing its year-to-date return to 8.4% after a revision of its preliminary May return to 4.2% from 4.3%.

The return for the MSCI Relative Value Index was flat in June, putting its year-to-date returns in a holding pattern at 5.3%. May’s Relative Value Index return was 1.4%, up a bit from the preliminary report of 1.2%.

Equity indexes performed well in June, with the Standard & Poor’s 500 Index returning 1.1% and the MSCI World Equity Index returning 1.6%. The MSCI World Sovereign Debt Index returned negative 1.6%.

Year-to-date returns were: 10.8% for the S&P 500; 10% for the MSCI World Equity Index; and 7.2% for the MSCI World Sovereign Debt Index.

MSCI’s preliminary data are based on 60% of funds in the Hedge Fund Composite Index reporting.

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