Emerging market strategy trumps hedges

Date: Wednesday, January 3, 2007
Author: Aaron Siegel, InvestmentNews.com

Emerging market hedge funds beat out other hedge fund strategies in 2006, according to a Wall Street Journal report.

Funds focusing on emerging markets gained 17.2% in 2006, compared to average gains of 13% for all hedge funds according to data calculated by the Credit Suisse/Tremont Hedge Fund Index as of December 28.

Hedge funds trailed market indexes for the year.

The Dow Jones World Index and The Standard & Poor's 500 gained 18.86% and 14.3% for the year, respectively.

Hedge funds betting on falling stock prices, on the other hand, fell 7.2% in 2006.

They now manage about $1.44 trillion in assets, compared to $1.28 trillion at the end of 2005.