Published by Bob Elliott July 15, 2024
Report Highlights
2Q 2024 Hedge Fund Strategy Performance, Gross of Fees
- Industry Return: 1.5%
- Best Performing Fund Style: Long/Short Equity 2.7%
- Worst Performing Fund Style: Global Macro (-0.1%)
Commentary
Hedge Fund performance in the second quarter was modestly positive across most hedge fund strategies, with Managed Futures and Global Macro managers notably delivering weak returns as market and economic trends oscillated quickly from March to April to May.
While Equity Long/Short managers held normal levels of overall equity exposure, they have increasingly rotated toward large cap growth stocks and away from small and mid-caps. This marks a sharp reversal in their approach in ‘22-’23 when managers were overweight smaller stocks with lower valuations. The shifts suggest that these managers have been an important support to the tech / growth stock outperformance dynamic, but that may not have as much room to further support advances higher.
Fixed income managers also continued to hold near record exposure to corporate spreads to generate modest returns despite secularly low spread levels. Current positioning suggests these managers are unlikely to have capacity to squeeze spreads lower. Across commodity markets, the industry holds widely divergent views – long agricultural commodities, gold, and metals, while near max short energy.
Read the full report (pages 1 -10) for additional context, charts and market commentary.