Hedge funds have come good during the first half of this year and are delivering on their aims to secure returns during market volatility.
According to data from the Association of Investment Companies (AIC), hedge funds were the second best performer in the first half of the year within the investment companies sector.
However, a total share price of return of 26.8% during the first half of the year was still not enough to take top spot in terms of the best performing sector.
As you may have guessed, technology and media scored the top spot with a return of 28.9% for the half-year:
|Investment Company Sector||Half-year return to 30th June 2020|
|Technology & Media||28.9%|
|Biotechnology & Healthcare||15.6%|
|Insurance & Reinsurance Strategies||7.8%|
|Global Smaller Companies||3.6%|
|Japanese Smaller Companies||3.3%|
Commenting on the performance, Annabel Brodie-Smith of the Association of Investment Companies highlighted that hedge funds were doing exactly what they were established to do:
“Investment companies in the Hedge Funds sector have achieved exactly what they set out to do, namely preserving capital during tough times and providing diversification to portfolios by investing in long and short equity positions as well as other more esoteric assets.”
Brodie-Smith also called on investors to think about the long-term when investing. When you look at some of the returns from investment companies within 10 years it is easy to see why – the average investment company has returned 170% while biotech and & healthcare have returned 506%!