Observations:
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Across PivotalPath’s hedge fund universe, 82% of managers reported positive performance in July, with 61% reporting positive performance YTD.
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After hitting an all-time high in March of this year, our proprietary Dispersion Indicator has been falling across hedge fund strategies. However, dispersion among both Managed Futures and Equity Diversified managers is ticking up in Q3. When clients ask us where to allocate manager research time, which is often constrained, we refer to this indicator as a consideration in our advice.
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While Healthcare was the exception to broad-based positive performance this month, notably the strategy continued to generate positive alpha, 6.8% over the last 12 months and 5.8% over the last 24. Last summer, we noted Healthcare managers’ ability to generate consistent alpha, placing them among the top of all strategies measured over various time periods.
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Many allocators refer to the MSCI Asia Pacific Index as a benchmark for their Asia Long/Short managers. While the equity index is down 2.2% YTD, hedge fund managers have done well across the region. PivotalPath’s Equity Diversified: Asia Long/Short Index is up for the 4th consecutive month, returning 11.3% YTD. Additionally, these managers have consistently generated alpha, averaging 2.3% over the previous 12 months.