In the latest iteration of Novus State of the Industry, we examine factor movements of June 2017, including best performing stocks & funds
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The wrestling match between the Novus Hedge Fund Universe (HFU) and the S&P 500 for return superiority continued in June. The industry outpaced the market 1.12% to 0.6% for the month, bringing YTD totals to 9.4% and 9.2%, respectively. The HFU continues to outpace underperforming Small Caps (R2K) and the struggling Value Index (R1K) as well. Growth (R1K) on the other hand, at 9.8% is the best YTD performer overall.
Which managers were the pacesetters for this outperformance as we end Q2? It was overwhelmingly healthcare specialists, with 4 out of the top 5 YTD performers hailing from that segment of the space. There was also a complete changing of the guard once again in the top 5 positions, with no holdover names from May.
Some of this healthcare excess return can be attributed to CLVS, which garnered a staggering 58% return in June due to some positive news, making CLVS the highest alpha generator by far for the month.
Turning now to factor indices, Conviction continues to enjoy strong outperformance, with gains in June bringing the index to a 21.3% YTD return. Consensus is the next closest competitor, returning 14.5%. It is worth noting that all the factors save Concentration (-1.3% YTD, though it did outperform in June) have outpaced both the broader industry and the US Equity Market.
Looking at the performance of the underlying sectors (S&P versus HFU), tech names were the largest outperformers in June, generating 1.50% of alpha. Discretionary names generated 1% of alpha, while the non-cyclical Utilities sector made an appearance with 0.93% of alpha for the month. Financials were the laggards, knocking 1.07% off HFU alpha for the month.Published on July 20, 2017