Morning Brief: HFR Index Posts Tenth Consecutive Monthly Gain

Another month, another gain for the average hedge fund. The HFRI Fund-Weighted Composite Index gained 0.8 percent in August, bringing its year-to-date gain to 5.5 percent, according to data tracker HFR. This was its tenth-straight monthly gain and 17th in the past 18 months. HFR’s Asset Weighted Composite Index rose 0.9 percent last month and is up 4.5 percent for the year. It has lost money in just one month this year.

Equity hedge and macro strategies led the way last month. Equity hedge strategies posted a 0.96 percent gain in August, bringing the HFRI Equity Hedge (Total) Index’s year-to-date return to 8.5 percent. HFR’s technology index was the best performing equity hedge sub-strategy, gaining 2.3 percent last month and 12.5 percent for the year. The healthcare index rose 2 percent last month and is up 12.9 percent for the year. The HFRI Macro (Total) Index rose 1.03 percent in August, led by commodity and quantitative, trend-following CTA strategies. It is now back in the black for the year, up 0.94 percent. HFR’s recently launched HFR Risk Parity Indices fared especially well last month. The HFR Risk Parity Vol 10 Index rose 2 percent in August and is now up 8.9 percent for the year, while the HFR Risk Parity Vol 15 Index rose 2.9 percent for the month and 12.8 percent for the year.

“Hedge fund gains were led by equity and trend-following exposures in August, as intra-month volatility increased as a result of escalating tensions regarding North Korea and the energy and commodity-centric impact of Hurricane Harvey,” said Kenneth Heinz, president of HFR, in a press release.

“Risk Parity strategies also gained in August despite modest changes in yields and mixed equity market performance, highlighting the important role of these within an institutional portfolio allocation.”

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Marcato Capital Management sold about 215,000 shares of Trinity Place Holdings, trimming its stake to 12.4 percent of the real estate holding, investment and asset management company.

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Perceptive Advisors bought nearly one million shares of Neurocrine Biosciences, boosting its stake in the biopharmaceutical company to 5.3 percent.

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Adage Capital Partners sold about one-quarter of its stake in Puma Biotechnology, reducing its holdings to 2.5 million shares, or 6.72 percent, of the development-stage biopharmaceutical company focused on developing cancer drugs.

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Two Sigma Ventures is one of a number of existing investors to participate in the latest $20 million financing for NS1, an intelligent DNS and traffic-management provider. According to the company, NS1’s software and services help companies optimize application delivery and keep their websites up and running.