Liquid Alts: Equity Hedge leads in July and YTD
The Wilshire Liquid Alternative Index was flat in July, leaving the year-to-date gain at 4.5%.
Five of the six liquid alt subindices were flat to slightly negative in July. Performance ranged from a low of -1.21% for Event Driven to a high of 0.73% for Equity Hedge. The S&P Index, which gained 2.4% in July, outperformed all the liquid alt subindices.
All the liquid sub-indices are positive for the year. Equity Hedge, which is outperforming year-to-date with a gain of 10.2%, is the only subindex in double-digit territory.
On a one-year annualized basis, Equity Hedge and Multi Strategy have generated double-digit gains. Again, Equity Hedge outperformed the other subindices, climbing 17.5%. On a three-year, five-year and ten-year annualized return basis, Equity Hedge also leads with a gain of 4.9%, 4.6% and 2.9% respectively.
The S&P 500 climbed 2.4% in July, generating an 18.0% year-to-date gain in 2021. The S&P 500 outperformed all the Wilshire subindices in July, year-to-date as well as on a one-year and three-year annualized return basis.
2021 and 1, 3, 5 Year Returns (Sorted by 2021 returns)
| Alternative Funds | July (%) | YTD 2021 (%) | 1-year annualized (%) | 3-year annualized (%) | 5-year annualized
(%) |
10-year annualized (%) | |||||
| Wilshire Liquid Alternative | 0.01 | 4.49 | 9.50 | 3.56 | 3.01 | 2.21 | |||||
| Wilshire Liquid Equity Hedge | 0.73 | 10.18 | 17.54 | 4.87 | 4.61 | 2.88 | |||||
| Wilshire Liquid Alternative Multi-Strategy | -0.02 | 5.49 | 10.75 | 2.83 | 3.00 | 1.99 | |||||
| Wilshire Alternative Global Macro | -0.31 | 3.87 | 7.13 | 3.48 | 1.36 | 0.97 | |||||
| Wilshire Focused Liquid Alternative | -0.34 | 3.60 | 8.76 | 3.79 | 3.21 | 2.26 | |||||
| Wilshire Liquid Event Driven | -1.21 | 1.85 | 6.69 | 3.93 | 3.50 | 2.01 | |||||
| Wilshire Liquid Alternative Relative Value | -0.10 | 1.16 | 5.25 | 3.06 | 2.70 | 2.48 | |||||
| S&P 500 | 2.4 | 18.0 | 36.5 | 18.2 | – | – | |||||
| Source: Wilshire Data, Capital Spectator | |||||||||||
The performance table shows that hedge funds have generally outperformed the Wilshire Liquid Alts Index in most years on an annual basis. The two exceptions were 2018 and 2011.
Comparison of Liquid Alts, Hedge Funds, S&P500
| Year | Liquid Alts (%) | Hedge Funds (%) | S&P500 (%) |
| 2010 | 3.52 | 10.52 | 15.06 |
| 2011 | -0.2 | -5.25 | 2.11 |
| 2012 | 5.01 | 6.36 | 16.00 |
| 2013 | 4.09 | 9.13 | 32.39 |
| 2014 | 1.55 | 3.30 | 13.69 |
| 2015 | -3.42 | -0.85 | 1.38 |
| 2016 | 2.26 | 5.57 | 9.50 |
| 2017 | 4.70 | 8.50 | 21.80 |
| 2018 | -4.27 | -4.10 | -4.40 |
| 2019 | 6.67 | 10.40 | 31.50 |
| 2020 | 3.18 | 11.60 | 18.4 |
| 2021
(7 months) |
4.49 | 10.11* | 18.0 |
*YTD through June, HFRI Fund Weighted Composite Index