Hedge funds droop but beat other indexes

Two major hedge fund indexes pointed downward in June but still managed to beat out the major equity indexes. Chicago-based Hedge Fund Research Inc.'s Fund Weighted Composite Index fell 0.68% in June and is down 0.75% this year. Meanwhile, HFR's Fund of Funds Composite Index fell 0.72% in June and is off 2.29% for the year. Leading the decliners were income convertible arbitrage, technology/health care and quantitative directional strategies, which declined 7.62%, 3.35% and 3.25%, respectively. On the positive side, the short bias and systemic diversified strategies increased 12.2% and 12.66%, respectively. Meanwhile, the Greenwich Global Hedge Fund Index, which is compiled by Greenwich (Conn.) Alternative Investments, fell 0.42% in June. Greenwich's long/short equity and the specialty-strategies groups fell 1.3% and 1.86%, respectively. The directional-trading and equity market-neutral groups posted returns in positive territory, recording increases of 2.02% and 1.88%, respectively. By comparison, the major market indexes suffered in June. The Standard & Poor's 500 Total Return Index fell 8.43%, the MSCI World Equity Index was off 8.1%, and the FTSE 100 Index declined 7.06%.