Latest Articles

HomeLatestMacro Strategies Struggle as Hedge Funds Exploit Market Volatility

Macro Strategies Struggle as Hedge Funds Exploit Market Volatility

Hedge funds had a mixed performance in July, with Macro strategies struggling while other strategies capitalized on market volatility. According to HFR, the HFRI Fund Weighted Composite (FWC) Index saw a rise of 0.8%, driven by strong gains in Equity Hedge and Event-Driven strategies, as well as notable performances from crypto funds. However, Macro strategies posted a 1.0% decline, marking their third consecutive monthly loss. This decline was largely attributed to losses in quantitative, trend-following CTA strategies and fundamental Commodity exposures.

In contrast, Fixed income-based, interest rate-sensitive strategies performed well, with the HFRI Relative Value (Total) Index advancing 0.8%, led by sub-strategies such as the HFRI RV: Yield Alternatives Index and the HFRI RV: FI-Convertible Arbitrage Index. The HFR Cryptocurrency Index also posted a significant gain of 5.4%, contributing to the positive overall performance.

Despite the challenges faced by Macro strategies, approximately two-thirds of hedge funds managed to produce positive returns in July. Performance dispersion widened during the month, highlighting the growing divergence between the best and worst-performing funds.

Kenneth Heinz, president of HFR, emphasized that the geopolitical and macroeconomic uncertainties are expected to continue influencing hedge fund strategies as institutions seek defensive capital preservation and opportunities amidst ongoing market volatility.

Related topics: