Event-driven hedge fund strategies post strong returns

Event-driven strategies are the leading growth component in the S&P Hedge Fund Index, generating a 10.38% return for the year-to-date, according to Standard & Poor’s.

The strategies included in S&P's event-driven sub-index are merger arbitrage, distressed and special situations. For July, the sub-index posted a 0.79% return on investment, outperforming the arbitrage and directional/tactical sub-indexes, which stood at 0.28% and 0.07% respectively.

But the event-driven sub-index performed worse than the previous month, when it posted a 1.43% monthly return.

By comparison with the Van Global Hedge Fund Index, S&P’s event-driven strategies fared worse than Van’s emerging markets strategy, which posted a 15.1% returns for the year-to-date in June.

The main S&P Hedge Fund Index offers an investable benchmark representative of the broad range of major strategies that hedge funds employ. The index has 40 constituents divided into the three sub-indices, which in turn represent nine specific strategies.