Tough trading conditions since the 2014 geo-political crisis in Russia and the Middle East have had a dire impact on the operating metrics of several FX and CFD providers. However, on the upside, fund managers have published their latest results, which came out stronger than expected during the slower, summer months of May and June. Two major indices that measure the performance of global hedge funds were positive.
Hedge fund managers posted strong trading performances during the month of June, according to two widely referenced indices. The Parker FX index was up 0.66% in May and the Barclays Hedge Fund Index saw an increase in its monthly performance of 1.41% in June.
Sol Waksman, pictured, Founder and President of BarclayHedge, commented about the fundamental events impacting the market in June, in a statement: “As investor’s shrugged off a downward revision of first quarter GDP and focused instead on the positive economic news coming out of the US, equity markets rallied to new all-time highs in June.”
Positive Sentiment in Equity Markets
All major US stock indices saw positive performances in June, with the Russell 2000 seeing gains of above 5.3% for the month. The Nasdaq Composite has continued its strong annual performance topping 3.9% in June, supporting its >5% gains for the year. In addition, the bleak Japanese market saw a slight rebound in domestic stocks. Mr. Waksman added: “Equity prices in emerging markets and Japan posted strong gains as well.”
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Emerging market stocks started seeing record outflows last year as the retraction in US equity markets pulled funds back into the world’s largest economy, however, emerging markets have seen light at the end of the tunnel. South Asia’s second largest economy, Pakistan, saw its benchmark stock index cross the formidable 29,000 mark in June.
The Barclays Hedge Fund Index is up 3.76% year-to-date (YTD), however the Parker FX Index is down 0.84% YTD.
The Parker FX Index is a specific index that measures the performance of currency programs, the index tracks, macro discretionary, model-driven and diversified currency programs.
The Barclays Hedge Fund Index is a performance indicator of global managed accounts and funds, the index tracking more than 6,200 hedge funds, funds of hedge funds and managed futures programs. Each month Barclay provides updated performance rankings for 38 Hedge Fund categories, 16 CTA categories, and 7 UCITS categories.
A London-based hedge fund manager believes the low volatility hasn’t impacted trader behaviour significantly as mainstream investment products have been faring well, saying, “US equity markets have retracted since the midst of the 2008 great recession.”