In a recently filed Hennessee Group report, hedge funds were found to have underperformed in the broader equity market for the month of June but showed an upshot over the year to date average.
Hedge funds decreased -.23% for the month but marked a +5.65% increase in the reported YTD average.
“Hedge funds underperformed in June as they were slow to react to shifts in volatility from 24 to 13 for the VIX,” says E. Lee Hennessee, managing principal of Hennessee Group LLC. “Nonetheless, event driven strategies like distressed, merger arbitrage and PIPES have helped balanced portfolios to outperform the market year-to-date.”
The Hennessee Long/Short Equity Index dropped -0.35% but once again marked an increase over the YTD average of +5.40% in June, as the volatile equity markets disappointed many funds.
Most long/short equity managers fortified their portfolios, drawing back to a more defensive posture in response to the negative equity markets at the beginning of the month, only to see the market rally in the waning days of June following the Federal Reserve’s interest rate meeting. But Hennessee says the majority of managers remains hesitantly optimistic on corporate fundamentals and do not foresee a bear market.