Hedge Funds Rebound in June

Earlier in the month global equity and commodity markets slumped, starting a monthlong decline in early May, sparked by concern that rising interest rates would curb economic growth. Commodities, including copper and gold led by emerging markets also fell.

These same hedge funds rebounded during the final week of June, recouping most of the losses incurred, according to the data compiled by Hedge Fund Research.

Hedge funds returned 6.1 percent on average in the first half, more than double the gain of the Standard & Poor’s 500-stock index. At that pace, managers are headed for their biggest gains since 2003, when returns averaged 19.6 percent, according to Hedge Fund Research, based in Chicago.

“Our main objective is to hold on to as much of the gains as we can following an adverse period,” said Omar Kodmani, senior executive officer at Permal Group, whose basket of funds returned as much as 5 percent in the first half. “The second half of 2006 looks reasonable,” he said in an interview with Bloomberg.