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Eurekahedge Jan 2008 Hedge Fund Index at -3% est.

Date: Wednesday, February 13, 2008
Author: Eurekahedge.com

Eurekahedge Jan 2008 Hedge Fund Index at -3% est., early reporting suggests a rough start of the year.

Early-reporting funds to the Eurekahedge databases suggest a rather rough start to the year 2008, with the Eurekahedge Hedge Fund Index having one of the worst months (-3%)*since its inception in January 2000. This was amid persisting turbulence in the underlying markets as investors remain uncertain about recessionary pressures in the US economy. Equities across major markets were down 10-20% intra-month, and ended the month negative; the MSCI World Index was down 7.7% on the month. The weakness in global equities was reflected in the performance of long/short managers, who returned -4.8% on the month. However, CTA (2.3%) and fixed income (1.5%) managers posted healthy gains; the former profited from short positions on the weakening US dollar (which declined further due to the Fedís aggressive rate cuts during the month), among other things, while the latter largely benefited from rallying bond markets.

In terms of regional mandates, North American managers (-0.7%) registered the least negative returns despite mounting concerns over recession, as healthy gains in short positions in equities and currencies offset some of the losses from other allocations. Market conditions in Europe were choppy as well, and were exacerbated by the turmoil at the French bank Societe Generale involving rogue trading; the Eurekahedge European Hedge Fund Index also had its weakest month (-3.1%) in the last several years. Emerging market-focused managers, however, were the most adversely affected (-6%), as large losses in regional equities in Emerging Asia, Latin America and Eastern Europe, took a toll on their performance. Eurekahedge indices are available for download from: