Aug.: Five Down, One To Inch Up

Date: Tuesday, September 4, 2007
Author: Hedge Fund Daily

As expected, August was pretty much a downer for hedge funds. Five of the six Dow Jones Hedge Fund Strategy Benchmarks ended the month at various levels of bad, and the only one to climb just barely did so. Equity long/short was hit hardest, losing -2.1%, but still the second-best performer for the year so far by far, with +9.8%. The year’s best performer to date, merger arbitrage, was the one uplifting note, as it inched up +0.6%, giving it 13.9% YTD. As for the rest of the group: Distressed securities lost -1.9%, dropping its annual take to +2.9%, followed by equity market neutral, which sank -1.8%, leaving it barely in the plus column for the year with +0.2%. Event driven notched -1%, giving it 4.7% for the year, and convertible arbitrage cut it’s year-to-date gains nearly in half by falling -1.5%, for +1.3% through Aug. 29. Looking at performance over the past 52 weeks, equity long/short plunged -4.5% to +16.8%, still second best, while merger arbitrage, remained steady, gaining +0.5% and 17.5% for that period.