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Sprott, Sehgal suffer in awful June for hedge funds Add to ...

Eric Sprott and Rohit Sehgal, two of Canada's best-known hedge fund managers, took a beating in June as they were unable to escape the market downdraft.

Commodity focused funds took the brunt of it in June as most natural resources sold off.

Mr. Sehgal's Dynamic Power Hedge fund, a big buyer of commodity plays, dropped for the fifth month in the past six. Mr. Sprott's flagship fund fell 8.6 per cent.

They weren't alone. Salida Capital and Front Street Capital, both big winners in the commodity bull run, also booked large pullbacks.

The volatile returns are a reminder that there's not much hedging going on at many funds, which in many cases are just aggressive bets on the commodity markets.

Mr. Sehgal's Dynamic Power Hedge dropped 5.1 per cent in June, bringing its year-to-date decline to 16.5 per cent, according to figures posted on the fund management company's web site.

Mr. Sprott's Sprott Hedge Fund dropped 8.6 per cent and Sprott Hedge Fund II fell 8.4 per cent, according to the company. Such numbers will be familiar to long term Sprott investors, who endured some big monthly drops in 2008 when the markets were in turmoil, but finished the year ahead.

Salida Capital's Strategic Growth Fund slumped 13.6 per cent in June alone, leaving it down 8.8 per cent for the year. Salida's Energy fund fell 9.3 per cent, leaving it down 5.7 per cent so far in 2011, according to Salida's web site.

Front Street Capital's energy fund had an even rougher June, sliding 17.4 per cent, according to the company web site. That leaves the year-to-date drop at 20 per cent.

 

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