Hedge Fund Strategies Struggle in Summer Market |
Date: Tuesday, July 22, 2008
Author: Colleen O\'Connor-Grant
The stock market's wild ride this summer has taken hedge funds along with it.
Eight out of 13 hedge fund strategies tracked by the EDHEC Alternative Indexes
posted negative returns for the month of June.
Even emerging market strategies, the best performing hedge fund strategy in May,
saw a decline of -2.58% in June. In fact, it was the worst performing strategy
last month, a very sudden turn of fortune for funds deploying this strategy.
Other strategies posting declines in June were: convertible arbitrage (-0.67%);
event driven (-1.32%); fixed income arbitrage (-0.20%); long/short equity
(-1.45%); merger arbitrage (-0.87%); relative value (-0.76%); and funds-of-funds
(-0.78%).
That said, short selling hedge funds achieved the highest rate of return at
8.08% in June, the EDHEC showed.
By comparison, the S&P 500 fell -8.4% in June and market volatility increased to
24%.
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