Hedge funds are able to recover quickly following market turmoil: report

Date: Thursday, October 11, 2007
Author: James Langton, Investment Executive

Hedge funds are able to recover quickly after market turmoil, according to new research from Credit Suisse Index Co., Inc.

The research examines the effects of five crises on hedge funds and world financial markets, finding that hedge funds, if affected, were able to return to positive returns quicker than global equity or debt markets.

It says that hedge funds have shown the ability to recover quickly after market turmoil in the past, exhibiting trends of correlation in subsequent bull market runs and decorrelation at market downturns surrounding the event. Even during the worst downturns, hedge funds were able to resume to positive returns quicker than global equity or debt markets.