The global hedge fund industry broadly held steady in July overall, with funds having exposure to China, energy and certain commodity markets suffering and detracting from gains elsewhere.

Hedge funds adopting what are called the macro systematic diversified strategy rose powerfully in July while some of the industry’s gains were blunted by market losses in China, energy and other commodity funds, new figures show.

Macro hedge fund strategies are directional: they use theories about broad economic trends, such as the path of interest rates, currencies and flows of money, to make money. With macro systematic diversified strategies, mathematical, algorithmic and technical models are employed to give out buy or sell signals, removing an element of human discretion.

According to latest figures, Chicago-headquartered Hedge Fund Research said its HFRI Fund Weighted Composite Index® logged a narrow gain of 0.01 per cent for July, bringing year-to-date performance through July to 2.5 per cent. The industry’s largest funds outperformed small and mid-sized funds in July, with the asset-weighted version of the FWCI posting a gain of 1.4 per cent.

Equity hedge strategies declined in the month, with the HFRI Equity Hedge Index falling 0.8 per cent, with negative contributions from funds with exposure to China and energy equities. The HFRI EM: China Index fell 7.7 per cent, its worst monthly performance since September 2011, although this decline is only approximately half that of the Shanghai Composite Index, which fell by -14.3 per cent for the month.

Energy equities also posted declines for July, with the volatile HFRI EH: Energy/Basic Materials Index falling by 6.7 per cent, its worst monthly decline since May 2012. Partially offsetting these declines, the HFRI EH: Technology/ Healthcare Index gained 2.1 per cent for July, leading all sub-strategy indices for 2015 with a YTD gain of 11.3 per cent.

Macro hedge funds had the strongest performance in July, with the HFRI Macro Index gaining 1.2 per cent. The HFRI Macro: Systematic Diversified/CTA Index gained 2.1 per cent in July, partially reversing the decline of 3.5 per cent from June, the worst monthly decline since May 2011.

Systematic diversified/CTA strategy gains were concentrated in exposures to short commodity, long US dollar, and variable equity market positions, with many of these positions having reversed from June, as quantitative models tracked strong and robust trends across these asset classes. The July gain brings the CTA Index back into positive territory for 2015, with a YTD gain of 0.4 per cent.

Performance across both event driven and fixed income-based relative value arbitrage strategies were also mixed for July, with the HFRI Event Driven Index posting a narrow decline of 0.3 per cent, while the HFRI Relative Value Arbitrage Index fell 0.03 per cent.