The Van Global Hedge Fund Index rose 0.9% net of fees last month, according to Van Hedge Fund Advisors International, Inc. (VAN), a leading hedge fund advisory firm. The Index has earned 9.0% net for the year to date. The Index measures the average performance of hedge funds worldwide and is a commonly cited industry benchmark. The July return is based on nearly 850 hedge fund returns.
“Hedge funds produced another positive month in July, although it was their smallest gain overall since March,” stated George Van, Chairman of VAN. “About two-thirds of hedge funds were positive, with many of those gains coming from long-short equity managers. Probably the biggest story among hedge funds in July was the marked slump in U.S. Treasuries; yields on the benchmark 10-Year Treasury note rebounded from a June low previously unseen in over 40 years. The result was losses for certain strategies that have a lot of exposure to fixed income securities, such as Income and Market Neutral Arbitrage, specifically Convertible Arbitrage and Fixed Income Arbitrage funds.”
VAN also produces a Global Index which excludes funds of funds. This Index fared slightly better in July with a 1.0% net return. It has gained 9.6% net year to date, indicating that funds of funds are slightly lagging single-manager hedge funds this year.
While the Global Index is based on a broad sample of funds regardless of their location, the Van U.S. Hedge Fund Index and Van Offshore Hedge Fund Index measure the average returns of U.S.-domiciled and non-U.S.-domiciled hedge funds, respectively. The Van U.S. Hedge Fund Index rose 1.0% net last month, bringing its year-to-date return to 9.8% net. The Van Offshore Hedge Fund Index gained 0.8% net and has risen 8.3% net so far this year.