Hedge Funds End Seven-Month Winning Streak
Hedge funds around the world saw negative returns in June to end seven months of straight gains amid a broad pull-back in equity markets, with those in Asia ex-Japan the worst hit, data from research firm Eurekahedge show.
The Eurekahedge Hedge Fund Index fell 1.47 percent in June, marking its first decline this year, the company said in a note published late on Wednesday. That compared with a fall of just over 3 percent in the MSCI World Index.
"June witnessed a continuation of downside momentum from the end of May as markets reacted adversely to speculation about a slowdown in the Fed's bond buying operations," Eurekahedge said.
(Read More: Global Markets Sigh in Relief on Bernanke Comments)
"Asia ex-Japan markets were the worst hit as lackluster manufacturing data from China continued the flow of dreary macroeconomic numbers from China," it added.
Hedge funds have profited from the sharp gains in equity markets since last year.
But talk that the Federal Reserve could start to take back its monetary stimulus for the U.S. economy has unnerved global stock markets in recent months and some analysts say that uncertainty is also weighing on hedge funds.
Soothing comments from Fed chief Ben Bernanke on Wednesday that the economy continues to need a highly accommodative monetary policy provided markets with some relief on Thursday.
Signs of weakness in regional powerhouse China have dealt an additional blow to Asian markets. Last month's closely-followed purchasing managers' surveys pointed to continued decline in manufacturing activity, while news on Wednesday that Chinese exports fell unexpectedly in June fueled concerns about China's economic outlook.
The Eurekahedge Asia ex-Japan Hedge Fund Index was down 4.63 percent in June, registering the largest decline among the research firm's regional indices. The North American Hedge Fund Index was down just 0.10 percent, while the European Hedge Fund Index slipped 1.16 percent.
(Read More: Expected Rotation Out of Bonds Rattles Hedge Funds)
Still, the Asia ex-Japan index outperformed the MSCI Asia ex-Japan stock index, which fell almost 7 percent last month.
Eurekahedge said its Japan Hedge Fund Index rose 0.15 percent in June, taking its gains so far this year to about 17.4 percent – the strongest of the regional hedge fund indices.
(Read More: JPMorgan Says It's Still Not Sold on Japan)
"While Prime Minister [Shinzo] Abe outlined the '3rd arrow' of his economic policy, it did not do much to boost up the market and funds with low long exposures were the ones that performed well during the month, while some managers with exposure to transport and industrials also reported gains," Eurekahedge said, referring to the disappointment with the long-term reforms announced by Abe last month.
—By CNBC's Dhara Ranasinghe; Follow her on Twitter: @DharaCNBC