The Van Global Hedge Fund Index gained 1.9% net of fees in July, according to hedge fund index provider Van Money Manager Research, LLC (VAN). July was the best month of the year for the industry with surging global equity markets providing long-biased managers in the Long/Short Equity Group with an attractive investment environment.
Convertible arbitrageurs likewise benefited from a good environment as credit spreads tightened, new issues increased, and volatility rose in select names due to earnings announcements. “The purported demise of hedge fund returns now seems exaggerated” noted Kevin Campbell, Vice President of VAN. “Over the past one-, two- and three-year periods, the Index has gained approximately 10%, 20% and 35%, respectively. Although the S&P 500, a standard benchmark for investors, has achieved higher returns over these periods (14%, 29%, and 43%, respectively), its annualized standard deviation is more than three times that of the VGHFI over this three-year period, 13.1% for the S&P 500 versus 4.2% for the Index, illustrating the benefits that hedge funds offer to investors.”