Hedge funds eked out a 0.05% gain on the Eurekahedge Hedge Fund Index in August, bringing their year-to-date return to 0.4%.
This compared with a return of 3.7% for the first eight months of 2018 for the MSCI AC World Index (Local). One in five hedge funds have outperformed this benchmark, according to Eurekahedge.
On an asset-weighted basis, hedge funds were down 0.8% in August and had declined 1.9% for the year as captured by the Mizuho Eurekahedge Hedge Fund Index (USD).
Distressed debt hedge funds were the outstanding performers by a wide margin in August, returning 2.2%. This brought their year-to-date return to 8.2%, the highest among all strategies.
CTA/managed futures hedge funds rebounded with a 1% gain in August. Underlying trend-following strategies were up 2.7%, offsetting losses 0.3% for foreign exchange-focused managers and 1.5% for commodity-focused ones.
AI hedge fund managers — those whose trading processes use artificial intelligence and machine learning theory — posted their fifth monthly loss in August, down 0.4%. The Eurekahedge AI Hedge Fund Index is down 2.6% for the year following a gain of 8.4% in 2017.
The Eurekahedge Crypto-Currency Hedge Fund Index, which tracks hedge funds that invest in crypto assets, took a big hit in August, down 13.1%, as Bitcoin, Ethereum and Ripple fell by 9.2%, 37.5% and 23.3%. For the year to date, cryptocurrency hedge fund managers are down 52.8%, underperforming the Bitcoin price index, which declined by 49.4% over the same period.