Morningstar, Inc., provider of independent investment research, today reported a summary of hedge fund performance for the second quarter of 2007.
Based on data from funds that reported returns to Morningstar as of July 13, 2007, hedge funds returned an average of 5.25 percent in the second quarter, beating first-quarter performance of 2.1 percent. Hedge funds slightly underperformed the SandP 500 Index, which returned 5.81 percent in the second quarter despite its loss in June.
Within the second quarter, April contributed the most to hedge fund performance with a monthly average return of 2.08 percent.
Emerging markets continued to lead the way, despite warnings of an impending market correction, with average returns of 9.7 percent in the second quarter. Among those, China funds fueled strong performance, recovering from the market setback in late February.
Rounding out the top performers, equity-net-long and equity-variable funds saw returns of 5.84 percent and 4.87 percent, respectively, benefiting from the strong equity markets.
“Overall, all hedge fund categories produced consistent returns and continued to contribute positively to 2007 year-to-date returns,” says Morningstar Hedge Fund Analyst, Carey Teichman. “Strong economies in emerging markets and a rise in global equities pushed hedge fund returns upward for the year.”