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In August, global financial markets traded in a volatile, wide range, exhibiting steep losses through a historic early-month global volatility spike. However, equity market losses mostly recovered by the end of the month. Interest rates declined as investors positioned for weakening economic growth, while geopolitical risks and uncertainty surrounding the upcoming US elections remain. Global equity markets were volatile in August, with US equities having a varied performance. Technology stocks led the way with advancements in AI and renewable energy driving growth, while small-cap stocks declined; Germany and Brazil led regional gains, while China and Japan led regional declines. Commodities saw mixed performance due to supply chain issues and geopolitical pressures, with Coffee, Aluminum, and Natural Gas leading commodity gains while Oil and Platinum declined.

Hedge Funds posted gains through August with the HFRX Market Directional Index gaining +1.26% and the HFRX Global Hedge Fund Index gaining +0.42% for the month.

HFRX Relative Value Index gained +0.98% for the month from gains in Convertible Arbitrage strategies and Multi-Strategy Managers. The HFRX Fixed Income Convertible Arbitrage Index gained +1.05% as markets traded in a wide range. The HFRX RV: Multi-Strategy Index gained +0.97% as interest rates declined in August.

HFRX Equity Hedge Index gained +0.78% for August from gains in Fundamental Growth & Value strategies as well as Market Neutral strategies. The HFRX Equity Market Neutral Index gained +1.04% from gains in mean reverting, factor-based strategies. The HFRX Fundamental Growth Index gained +0.78% from gains in exposure to small-cap US and European equities. The HFRX Fundamental Value Index gained +0.75% from gains concentrated in large-cap US and European equities.

HFRX Event Driven Index gained +0.64% for the month from gains in Special Situations managers and Merger Arbitrage strategies. The HFRX Special Situations Index gained +0.65% from gains in exposure to global catalyst-driven fundamental value equities. The HFRX Merger Arbitrage Index gained +0.44% as global equity markets were volatile in August.

HFRX Macro/CTA Index declined -1.49% for August from declines seen in systematic trend-following managers. The HFRX Macro Systematic/CTA Index declined -3.63% as the US Dollar declined against most currencies. Commodities saw mixed performance in August with Coffee and Aluminum leading gains while Oil and Platinum led declines.

Comments reference performance figures as of August 30, 2024