| Hedge fund performance still in limbo |
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| 26/09/2004 | |
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Major hedge fund indices are all slightly up for the month of August. The CSFB/Tremont Hedge Fund Index is up 0.14% for August 2004, from a negative performance of 0.31% the previous month. Hedge fund managers take advantage of volatility benefited from increasingly shaky market conditions. While most strategies were slightly on the upside, dedicated short bias funds took a beating, falling to 1.27% from 8.12% the month before. The index slightly underperformed all of its benchmark but one, the NASDAQ Composite Index, which was down at –2.61% in August. The EDHEC hedge fund index ticked up by 10bp in August, going from a 0.16% performance in July to 0.26% in August. Only four strategies out of 9 were down, with one, short selling, free falling from a 6.38% return in July to 1.25% in August. This strategy remained one of the best performing in the index, only to be beaten by the emerging market strategy, which came back into positive territory in August with returns up at 1.33%. The Hennessee Hedge Fund Index produced a positive return of +0.17% in August, bringing the 2004 year to date return to +1.16%. The Hennessee Short Biased Index was once again the top-performing index in August, with a return of +5.37%, or +20.12% year to date. "Hedge fund managers we talked to stated a reluctance to make too large a play on market direction as entire sectors experienced wide swings on stock specific news," stated Charles Gradante, Managing Principal of Hennessee Group LLC. "It is one of the toughest markets to play with any conviction and this lack of conviction breeds weakness. Warnings from Homeland Security Secretary Tom Ridge of a "large scale" terrorist attack to disrupt the elections have further weakened conviction in the market." J.L. |
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