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Barclay Hedge Fund Index up 2.06 per cent in August

Date: Thursday, September 17, 2009
Author: HedgeWeek

Hedge funds rose 2.06 per cent in August, according to the Barclay Hedge Fund Index compiled by BarclayHedge.

'After recording six straight months of positive returns, the Barclay Hedge Fund Index has now gained 16.48 percent in 2009, versus a gain of 14.97 per cent for the S&P 500 Total Return Index,' says Sol Waksman, founder and president of BarclayHedge.

Overall, 16 of Barclay's 18 hedge fund indices were profitable in August. The Barclay European Equities Index gained 4.50 per cent, convertible arbitrage was up 3.73 per cent, distressed securities added 3.08 per cent, and equity long bias gained 3.04 per cent.

'Strong performance in three sectors - European equities, emerging markets and Pacific Rim equities - indicates the global nature of recent stock market gains,' says Waksman.
'The rally in fixed income was uninterrupted in September and credit spreads continued to narrow; both positive trends for many hedge fund strategies.'

Year-to-date, 12 of Barclay's 18 hedge fund indices have achieved double-digit returns. The Convertible Arbitrage Index has returned 40.70 per cent, emerging markets is up 30.39 per cent, equity long bias has gained 21.14 per cent, healthcare & biotechnology is up 20.26 per cent, the Event Driven Index has gained 20.10 per cent, and Pacific Rim equities are up 15.20.

Other indices gaining ten per cent or more include multi strategy, distressed securities, European equities, technology, and equity long/short.

The Equity Short Bias Index lost 1.75 per cent in August. Short bias is now down 12.04 per cent in 2009.

'A 40.53 per cent increase in the S&P 500 over the past six months has created problems for managers trading the short side of the market,' says Waksman. 'Although the Barclay Equity Short Bias Index was up a record 40.91 per cent in 2008, the recent uptrend in stocks has significantly reduced total returns for short-sellers for the period beginning 1 January 2008.'

The Barclay Fund of Funds Index gained 1.09 per cent in August, and is up 6.89 per cent year-to-date.