Credit Suisse: Hedge Funds Down More Than 1% In August

Sep 2 2010 | 11:21am ET

Hedge funds were burned by plummeting equities markets in August, according to one industry benchmark.

Credit Suisse’s Liquid Alternative Beta Index dropped 1.14% last month, leaving it up 1.81% on the year. But that wasn’t nearly as bad as the losses posted by the broader markets, with the Standard & Poor’s 500 Index dropping 4.7%.

“While the Credit Suisse Liquid Alternative Beta Index was down 1.14% in August, it outperformed the MSCI World, which fell 4.03%,” Jordan Drachman, head of alternative beta strategies research, said. “Despite the month's negative returns, LAB remains largely positive year-to-date with three of the four LAB sector indices posting gains.”

In August, however, only one posted positive gains: Global Macro, which added 0.69% on the month and is up 1.8% on the year. The other three strategy indices declined: Merger arbitrage funds fell 0.39% (up 5.57% year-to-date), event-driven funds fell 1.78% (up 4.04% YTD) and long/short funds fell 2.11% (down 0.1% YTD).

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