Hedge funds delivered their best monthly returns in more than two years in June, with event-driven strategies leading the pack, followed by equity hedge funds with significant exposure in growth sectors and artificial intelligence, according to HFR.
The investible HFRI 500 Fund-Weighted Composite index surged an estimated 2.35% in the month ended June 30, its best monthly return since February 2021, according to HFR, the research firm tracking the global hedge fund industry.
Also, the HFRI Fund-Weighted Composite index performed strongly in June, with an estimated return of 2.2%.
Event-driven strategies led all strategy gains in June, driven by shareholder activist and special situation substrategies. The investible HFRI 500 Event Driven index rose an estimated 3.05% in June, and the HFRI Event Driven (Total) index gained 2.8%.
Within event-driven strategies, the HFRI ED: Activist index and HFRI 500 ED: Special Situations index, returned 5.9% and 4%, respectively, for the month ended June 30.
Equity hedge funds delivered the second-best gains for the month, driven by exposure to growth strategies, along with artificial intelligence, according to HFR.
"While the transformative impact of AI has begun and accelerated in recent months, it has the potential to impact a wide range of industries with exponential growth while transforming competitive landscapes, albeit with expected high volatility and potential for extreme dislocations as these evolutionary transformations develop," said Kenneth J. Heinz, president of HFR, in a news release Monday. "Institutional investors seeking access to these specialized, powerful trends are likely to allocate and expand commitments to managers, which have demonstrated their capacity and capabilities through the early stages of this transformative market dynamic."
The HFRI Equity Hedge (Total) index returned an estimated 2.94% in June, and the investible HFRI 500 Equity Hedge (Total) index returned 2.85%.
Within equity hedge strategies, the HFRI 500 EH: Quantitative Directional index and HFRI 500 EH: Fundamental Growth index returned 4.1% and 3.9%, respectively, for the month ended June 30.
HFR also noted that performance dispersion fell in June, with the top decile of its fund-weighted composite constituents rising 9.85%, while the bottom decile lost 3.5%. That dispersion of 13.35 percentage points was below the 14 percentage point dispersion in May.
Uncorrelated macro strategies, fixed income-based and liquid alternative UCITS strategies also posted positive returns in June.
