Hedge Funds Gain 0.6% in July as Stocks Rally on BernankeKelly Bit
Hedge funds returned an average 0.6 percent in July as global stocks rallied following assurances from Federal Reserve Chairman Ben Bernanke that the central bank won’t withdraw its monetary stimulus prematurely.
Macro and multistrategy funds fell in July and long-short equity managers rose, data complied by Bloomberg show. Funds managed by Bridgewater Associates LP, Renaissance Technologies LLC and Paulson & Co. reported gains in July, while Tudor Investment Corp. posted a decline, according to people briefed on the returns.
“Hedge fund performance for July was in aggregate positive but delivered a mixed bag of results at the underlying strategy level,” Anthony Lawler, portfolio manager at Swiss asset manager GAM, wrote in a August 2 report. “Equity-based strategies performed well. July was choppy and challenging for global macro and CTA managers,” an acronym for trend-following commodity-trading advisers.
Billionaire John Paulson posted gains in all four of his hedge-fund firm’s main strategies in July as his Recovery fund recouped losses incurred in 2011, a person familiar with the matter said. Hedge funds overall trailed global stocks, which rose 4.7 percent last month after Bernanke said that it’s too early to decide whether to begin scaling back debt purchases in September, after surprising markets in June by saying that bond buying could slow if the economy improves.
Hedge funds’ first monthly gain since April brings yearly returns to 3.2 percent. The Bloomberg Hedge Funds Aggregate Index is down 5.6 percent from its July 2007 peak. The index is weighted by market capitalization and tracks 2,497 funds, 1,286 of which have reported returns for July. The index, with annual data dating to 2006, has fallen short of the MSCI benchmark each year except for 2008 and 2011.
Macro funds fell 0.1 percent in July and 2.3 percent this year. Multistrategy managers fell 1.3 percent last month and advanced 0.4 percent in 2013. Long-short equity managers rose 1.3 percent in July and 5.2 percent this year.
Tudor, the $13.2 billion global macro hedge fund founded by Paul Tudor Jones, lost 2.8 percent in July in its Tudor BVI Global, paring yearly gains to 8.9 percent, according to another person, who, like the others, asked not to be identified because the information is private.
Bridgewater Associates’ Pure Alpha II fund rose 3 percent last month, bringing gains for the year to 1.9 percent, said a person briefed on the returns. The fund rose about 1 percent so far this month, the person said. Ray Dalio’s Westport, Connecticut-based firm manages about $145 billion.
Renaissance Technologies, the $22 billion investment firm founded by Jim Simons based in New York, rose 1.8 percent in July in its Renaissance Institutional Equities Fund, bringing returns this year to 11 percent, according to the person.
Spokesmen for the firms declined to comment on the returns.