Early results indicate that hedge funds suffered less damage in June than originally predicted. Of the six strategies in the Dow Jones Hedge Fund Strategy Benchmarks Index, only equity long/short suffered a relatively severe fall, down 1.6% on the month, while convertible arbitrage was off by a paltry 0.1%. Distressed securities was flat, but the other three all inched up following May’s fall, with merger arbitrage up 1.1, event driven up 0.3%, and equity market neutral up 0.8%. The strategies made something of a comeback at the tail end of June, but the past month has taken a toll on the 52-week returns, with equity long/short falling from 8.9% at the end of May to 6.3% at the end of June. Four other strategies recorded 52-week drops, except for merger arbitrage which rose 0.8% for the period. Hit hardest in the 52-week returns are convertible arbitrage (down 2.1%), event driven (down 1.2%) and distressed securities (down 1.5%). Meanwhile, Merrill Lynch says hedge funds lost an average of 0.65% in June – about half the May losses, but HFs are still well ahead of the S&P 500 index year to date, 3.8% to 1.8%.