Hedge Funds who invest in currencies saw an overall decline in performance for the month of June. The industry benchmark, Parker Index fell 1.14% last month. The decline leaves it down 0.35% this year, and marks the third month in past six that the index is losing.
Currencies have had strong sideway moves over the last three months after France’s new president was elected. The Euro made declines as soon as the decision was made and dropped below to 1.2955 hitting a three-month low (since Jan 25 2012). The downhill move continued as Greece was still under the limelight and the Euro hit 1.2280 a figure not seen since July 2010.
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Qualified currency managers are regulated either in US or with ARIF in Switzerland. They trade on modest leverage using sophisticated ECN platforms like Currenex, recently many hedge funds have been using automated trading robots on MT4 since the new wave of bridges connecting the retail orientated platform to the interbank market.
May saw reasonable growth for the Index, the Parker FX Index reported +0.47% return. Fifty-one programs in the Index reported their May results, of which thirty-one reported positive results and twenty incurred losses. On a risk-adjusted basis, the Index was up 0.20% in May. The median return for the month was up +0.84%, while the performance for May ranged from a high of +11.36% to a low of -25.66%.
Capricorn FX one of the leading FX fund managers publishes results in the range of 0.62% (June 2012). On the other hand Swiss based Bull Camb FX achieved 12% in 2011. Hedge funds can charge investors entry and/ or management fees of 2% each, this is accompanied with performance fees ranging from 15 to 35% with a high water mark and reset (depends on strategy).