Hedge funds reined in their losses in July, as global financial markets witnessed sharp declines and reversals across major asset classes; the Dow Jones-AIG Commodity Index fell 12%, while the MSCI World Index, after shedding 5.6% intra-month, finished the month down 2.5%. By comparison, the Eurekahedge Hedge Fund Index declined by a relatively modest 2.5%1, on the month.
July saw most regional mandates finish in the red. Managers allocating to North America, Latin America, Asia ex-Japan and Japan were all down between 1% and 1.8%, being negatively impacted by the sudden decline in commodity prices across the board. Furthermore, the bounceback in equities at mid-month led managers to unwind their long commodity and short equity positions, resulting in losses during the month.
