Major hedge fund indexes all produced positive returns for the first six months of 2009, a reversal from the first half of 2008 when most hedge fund indexes had negative performance.
The Hennessee Hedge Fund index was up 11.74% year-to-date June 30 — its best six-month return since 1999.
“The last time we saw a double-digit gain for hedge funds in the first six months of the year was in the midst of a strong bull market when the S&P 500 (index) was also experiencing double-digit gains,” Charles Gradante, co-founder of Hennessee Group, said in a news release.
“Hedge fund managers have demonstrated an ability to generate alpha via strong stock selection on both the long and short side of their portfolios while taking on little directional exposure,” Mr. Gradante continued.
Among other first-half returns, the Barclay Hedge Fund index was up 11.17%; HFRI Fund Weighted Composite, 9.41%; Eurekahedge Hedge Fund, 9.38%; and Credit Suisse/Tremont Hedge Fund, 7.23%.
The average hedge fund return was 9.24%, according to HedgeFund.net's HFN Hedge Fund Aggregate Average, based on manager returns in its database.
Among hedge fund-of-funds indexes, HFRI Fund of Funds Composite index returned 5.24%; the Eurekahedge Fund of Funds, 3.81%; and the HFN Fund of Funds Aggregate Average, 3.72%.
Hedge fund and funds-of-funds manager indexes all beat the S&P 500's 3.19% return and the Barclays Aggregate Bond index return of 1.9% for the first six months of the year, although the MSCI World index return of 9.35% bested some hedge fund indexes and the hedge fund-of-funds indexes.
HedgeFund.net reported that flows were positive in May and June after four months of outflows, with a net $16 billion moving into hedge funds in May and $5 billion in June. The past two months of net inflows raised total hedge fund industry assets to $1.778 trillion, nearly back to the Jan. 1 industry AUM of $1.786 trillion, after a nadir of $1.674 trillion on April 30.