Dow Jones Credit Suisse Hedge Fund Index team releases paper on hedge fund performance

Hedge Fund Index's report plots market trends and singles out market leaders

The Dow Jones Credit Suisse Hedge Fund Index team has released a new paper, 'H1 2010 Hedge Fund Industry Review,' that examines the current market environment and its effect on hedge fund returns in the first half of the year.

To date in 2010, hedge funds have outperformed many global equity markets, posting returns of 0.6 per cent year-to-date through June 30, as managers continued to employ a diverse range of alpha-generating investment strategies.

The report examines the current return drivers in the industry and explores some of the trends that have characterized markets in recent months.

According to the report, performance among the 10 index sectors was mixed with six out of the 10 sectors in the index posting positive performance in the first half of the year.

Top performers included Fixed Income Arbitrage (+5.5 per cent), Global Macro (+4.2 per cent) and Event Driven (+1.8 per cent).

Individual fund returns have been more dispersed this year with 51 per cent of all funds posting positive performance compared to 80 per cent for the same period in 2009.

While the repayment of 'impaired' assets has slowed, an estimated 68 per cent of all impaired assets have been repaid to investors representing $118 billion, according to the report.

The hedge fund industry experienced estimated net outflows of approximately $1.4bn in the first quarter, though strategies with traditionally lower correlation to broad markets experienced overall inflows.

Including performance gains, estimated industry assets under management currently remain at $1.5 trillion, as of June 30, 2010.

In addition, the team has also published a new monthly commentary which offers insight into June hedge fund performance.