A monitor displays stock information on the floor of the New York Stock Exchange (NYSE) in New York, U.S. (Photographer: Michael Nagle/Bloomberg)

Equity Hedge Funds Extend Gains in August to Lead Industry

(Bloomberg) -- Stock-picking hedge funds were the best performers in August as U.S. equities pushed toward a new record.

The managers who bet both long and short on stocks gained 1.1 percent last month on an asset-weighted basis and are up 3.5 percent in the first eight months of the year, according to a report Monday by Hedge Fund Research. Event-driven hedge funds are leading strategies overall for the year with a 3.7 percent jump.

On average, hedge funds rose 0.5 percent in August and 1.9 percent this year on an asset-weighted basis. The performance has fallen short of the S&P 500 Index, which gained 3.3 percent in August, with dividends reinvested, and returned about 10 percent this year through last month.

Multi-Strategy Gains

Some multi-strategy hedge funds are this year’s bright spots. Citadel’s flagship Kensington and Wellington funds gained 1.7 percent last month, bringing returns to 11.2 percent for the year, according to a person with knowledge of the matter, who asked not to be identified. The performance in August was led by equity, quantitative and commodities strategies.

Citadel’s Global Equities fund gained 0.9 percent in August, bringing performance for the first eight months of the year to 6.9 percent, the person said. The Global Fixed Income fund was up 0.6 percent last month, leaving returns through this year at about 8.5 percent, while the Tactical Trading fund, which uses equity and quant strategies, jumped about 2 percent in August and is up 10.9 percent for the year. A spokeswoman for Ken Griffin’s $30 billion firm declined to comment.

Other multi-strategy funds that have done well this year include Izzy Englander’s Millennium Management. The firm’s flagship fund is up almost 7 percent in 2018 after gaining 1.4 percent in August. Dan Och’s master fund at the $33 billion Och-Ziff Capital Management Group LLC rose about 4 percent in the period, filings show.

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