Hedge funds outperformed the market in a difficult August


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Hedge funds performed well against a difficult equity market last month, according to Pivotal Path, which tracks more than “2,500 institutionally relevant hedge funds, spanning >$2.5T of industry assets.”

The PivotalPath Hedge Fund Composite Index rose 1.3% last month. The S&P 500 (SP500) (NYSEARCA:SPY) was down 2.06% and the Nasdaq Composite (NDX:IND) (NASDAQ:QQQ) shed 3.1%.

“Year-to-date the PivotalPath Composite is down 1% compared to the S&P 500 (-16.4%) and the Nasdaq (-24.5%).”

“Managed Futures and Global Macro recovered from June and continued their strong performance this year,” it added. “The two indices were up 3.1% and 3.4% respectively in August.”

“Year-to-date the PivotalPath Managed Futures Index is up 16.6% while the Global Macro Index is up 12.7%. Equity Diversified lost 0.6% after a strong July and has fallen 7.7% for the year. Within this, European Long/Short experienced a 2.6% decline during the month of August.”

The “past three months have seen significant market swings coinciding with economic and geo-political events,” they said. “The Fed’s goal of controlling inflation with aggressive rate hikes, while managing a soft landing, remains elusive.”

“Combine that with continued supply chain issues arising out of China’s zero Covid policy and the ongoing war in Ukraine, resulting in renewed market volatility. The S&P 500 (SPY), Russell 2000 (IWM) and Nasdaq (COMP.IND) (QQQ) declined in August 4.1%, 2.18%, and 4.64%, respectively. YTD, these Indices are down 16.1%, 17.9%, and 24.5%, respectively.”

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