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Investing.com -- Hedge funds globally rose 1.1% in July, with event-driven managers and fundamental equity long/short funds leading the gains, according to Goldman Sachs Prime Desk.
Event-driven strategies posted a 1.8% increase last month, benefiting from heightened merger arbitrage activity. Fundamental equity long/short funds followed closely with a 1.6% gain. Despite these positive results, both strategy types underperformed compared to the S&P 500, which advanced 2.2% during the same period.
Quantitative strategies continued to struggle, recording losses for the second consecutive month. These strategies were particularly impacted by short-term US-focused trades such as statistical arbitrage, while slower-moving, factor-based approaches performed relatively better.
The challenges for quantitative managers were compounded by momentum reversals and rallies in heavily shorted US stocks. Goldman Sachs Prime Desk noted that their model indicated quantitative managers were experiencing "one of their worst drawdowns per our records in July before a rebound at month-end."
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