They still aren’t beating the market, but hedge funds did reasonably well during the first half of 2017, led by strategies focusing on Emerging Markets, Activism, and Europe. The laggards: CTAs, Global Macro, and Distressed. The near-term outlook for funds remain benign. But the big worries: extremely low volatility, unproven leadership coming out Washington, and a slew of global issues, each with the capacity to shock markets.

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