Hedge funds rise 3 pct in Sept, up 17 pct in '09

Date: Thursday, October 8, 2009
Author: Joseph A. Giannone, Reuters

Hedge funds on average climbed 3.0 percent last month, continuing a rebound that adds up to a 17 percent gain so far this year, according to Hedge Fund Research data released on Wednesday.

It was the seventh consecutive month of rising fund values, according to HFR, one of the several firms that track hedge fund performance.

Every hedge fund investment strategy posted gains for the month and the year, HFR said, with the exception short-selling funds, which are down nearly 20 percent in 2009.

Top performers include distressed investing and restructuring funds, which rose 5 percent in September and 22 percent this year. Emerging markets funds were up 6.2 percent last month and 35 percent for 2009.

But hedge funds still lag the broader U.S. stock market. Investors playing the S&P 500 Index would have seen their bets climb more than 19 percent this year, even before dividend payments, and 3.7 percent last month.

Hedge funds on average fell 19 percent last year, the first red ink since 2002, and cash-starved investors sought to withdraw record amounts. The rebound this year has helped stem redemptions and could take pressure off fund managers.