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Hedge Funds

Hedge fund index returns show tiny increase for quarter

Hedge funds eked out a positive return in the quarter ended June 30, data released by Hedge Fund Research showed.

The HFRI Fund Weighted Composite index was up 0.86% in the second quarter, compared to 0.75% for the HFRI Asset Weighted Composite index.

Previous returns of the HFRI Fund Weighted index were -0.05% for the quarter ended March 31 and 1.03% for the quarter ended June 30, 2017. The index returned 0.81% year-to-date June 30.

Returns of the HFRI Asset Weighted index were 0.48% for the three months ended March 31 and 0.65% for the second quarter of 2017. The index returned 1.23% year-to-date June 30.

The HFRI Fund of Funds Composite index was down 0.41% for the quarter ended June 30, up 0.45% for the quarter ended March 31, and up 0.45% year-to-date June 30. By way of comparison, the index's second quarter 2017 return was 0.81%.

The best performing HFRI index for quarter ended June 30 was the HFRI Event-Driven (Total) index, returning 2.26%, followed by the HFRI Relative Value (Total) index, 1.24%; HFRI Equity Hedge (Total) index, 0.84%; and HFRI Macro (Total) index, -0.21%.

"Trade tariff equity volatility has increased concurrent with strong U.S. earnings at the same time that the U.S. yield curve flattened and the U.S. (Federal Reserve Bank) increased rates, creating additional pressure on non-U.S. equities," said Kenneth J. Heinz, HFR's president, in a news release Monday accompanying the report.

"These trade-centric macroeconomic drivers are likely to accelerate during the (second half of 2018), inclusive of meetings between the U.S. and Russia, contributing to a fluid environment and increased opportunity set for long/short investing across multiple asset classes globally," Mr. Heinz added. "(Hedge) funds which have demonstrated ability to navigate this environment are likely to drive performance and growth in the (second half of 2018)."