Long/Short Equity managers who maintained a cautious stance through the recent market run-up appeared to be positioned to profit as markets shifted from cyclicals to defensives in June. Overall, the Credit Suisse/Tremont Hedge Fund Index finished up 0.43% for June, bringing year to date to 7.18%.

A monthly commentary provides insight into June hedge fund performance. Some key findings from the report include:

- Convertible Arbitrage funds continued to post the best performance of all the strategies in the Broad Index, with 4.05% for June and 23.95% cumulative performance YTD. As equity markets’ recovered in the second quarter, managers began to profit again from the volatility arbitrage aspect of the strategy.

- Overall, Emerging Markets finished the month relatively flat despite a rebound in economic activity in Asia, as countries across the region saw rising industrial and manufacturing output.

- Credit-oriented hedge funds performed well as credit markets showed healthy activity, with $102 billion of investment grade bonds brought to the market in June. Many believe continued governments’ activism in the markets could provide additional opportunities for these managers.

- Global Macro hedge funds posted their first negative monthly performance since October 2008 as the sell-off of short rates in US Treasuries negatively impacted the positions of a number of Global Macro hedge funds early in the month.

To view the commentary in full, please click here