Hedge fund performance poor for 2018 - Limited alpha generation

Hedge fund styles as measured by the HFR indices, on average showed negative performance for June. EM strategies were the hardest hit sector. The only bright spots were merger arbitrage, defensive strategies like global macro and relative value. The general decline in equity markets globally and more mixed performance in the US held back returns. 

Hedge fund performance for the first half of the year was a disappointment for the investors. Most hedge fund style declined for through June. The only strategies that generated positive returns were focused on relative value. With equity indices in the US generating gains for the first half of the year, there was limited alpha from hedge fund managers. Hedge funds will have to work hard to make up this shortfall.