Markets can't be bossed around.
But hedge funds deftly navigated August volatility, gaining 1.1 percent in August as measured by PivotalPath’s Composite Index. Technology funds turned around, with the Technology/Media/Telecom Index gaining 2.66 percent after an 8.27 percent loss in July. The headline numbers, however, obscure the gap in performance between strategies.
The Global Macro Index and Managed Futures Index each gained 2.4 percent, more than double the broad Composite Index, as Treasury Secretary Scott Bessent intervened in bond markets in an effort to slow the rise in U.S. government bond yields. The Discretionary Macro Index gained 2.5 percent and the Quant Macro Index 2 percent. For the year through August, Global Macro and Managed Futured returned 6.8 and 9 percent, respectively.
Macro hedge funds repositioned their bets on the U.S. dollar and currencies broadly, Treasury bonds, crypto and gold.
Last month, Bessent announced that the government would “at least double” its buying of long-term debt as yields hit record highs amid concerns over inflation. The aggressive policy, which included propping up the Japanese yen, produced a wild August as investors sold bonds despite the new policy and the U.S. dollar declined.
Every month Institutional Investor publishes a subset of hedge fund indices from PivotalPath. Scroll to the end of the article to view 12 indices, including credit, equity diversified, equity market neutral, global macro, relative value, and others.
Stocks rebounded last month. PivotalPath’s Equity Diversified Index gained 1.6 percent and the Equity Sector Index increased 1.8 percent. The Asia Equity Index was the top performer, gaining 3.1 percent, while European Equity gained 2.5 percent.
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August may have been a macro moment, but it didn’t necessarily dominate the year.
Diversified Equity and Equity Sector are up 8.9 percent and 13.7 percent for the year through August. Multi-sector gained 6.2 percent and the PivotalPath Relative Value index generated a return of 5.2 percent.
