Whereas the S&P 500 declined 0.99%, the Dow Jones Industrial Average rose 0.25% and the Nasdaq Composite Index gained 1.42% in July, the Hennesee Hedge Fund Index fell 1.95%.
Hedge fund managers are very cautious due to U.S. housing declines, poor economic data and higher commodity prices, said
Managing Principal E. Lee Hennessee said the themes most profitable for managers in the first half of the yearshort financial and long energyexperienced a very sharp reversal in July.
Gradante believes the pullback in commodities is a short-term correction, saying demand for agricultural commodities and oil could continue to outweigh supply for years.