Hedge fund performance positive in August, down from July

By James Langton

Hedge fund performance remained positive in August, although sliding back from July’s return totals, according to the CSFB/Tremont Hedge Fund Index.

The overall index was up 0.88% in August reports Oliver Schupp, president of Credit Suisse First Boston Tremont Index LLC. This is down from the 1.9% gain witnessed in July. In the year to date, the index is up just 4.2%.

“Despite US and European equity markets being down on concerns of the impact of rising oil prices both long/short equity hedge funds and dedicated short managers reported positive performance in August,” Schupp says noting that hedge fund managers were able to profit from stock specific short positions. Dedicated shorts led the way with a 2.5% return in the month

Emerging market funds were second strongest in the month, up 2.29%. Schupp says managers in this sector generated performance on the back of rallying equity markets in Russia, China and Argentina.

Robert Schulman, chief executive officer of Tremont Capital Management Inc. notes that convertible managers “profited from the pick-up in volatility and a reversal of recent selling pressure.”

Managed futures was the only strategy among the CSFB/Tremont SubIndices which ended the month down, dropping 0.87%. “Profits in the sector were more then offset by losses from reversals in the currency and bond markets,” it notes.