FX centric funds have experienced negative performance for the month of July, as volatile price action in the vibrant FX markets puts a strain on managers. The Parker FX Index, a leading industry index that measures the performance of currency focused funds dipped by 0.95%. The usually quiet summer has been awakened by volatile markets plagued by the Feds tapering decision.
July’s poor figures follow on from declines reported in June, where the index reported a drop of 0.33%. In July, thirty-nine of the forty-two programs in the Index reported their results, of which ten reported positive results and twenty-nine incurred losses. On a risk-adjusted basis, the Index was down -0.41% in July. The median return for the month was -1.26%, while the performance for July ranged from a high of +5.33% to a low of -5.90%.
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2013 has been the year of volatility, driven by the US bond buying program, Abenomics and the downfall of commodity and emerging market currencies. Last month, the US dollar witnessed strong price movements and the US Dollar index experienced its largest one day decline since March 2009. Across the Atlantic,the euro was also in the limelight as fundamental factors were gearing towards positive performance.