Hedge Funds Mostly Flat In August

Sep 7 2010 | 8:26am ET

Hedge funds inched up in August, avoiding the steep decline suffered by the broader markets last month.

The average hedge fund returned 0.17%, according to Hedge Fund Research’s HFRX Global Hedge Fund Index. By contrast, the Standard & Poor’s 500 Index fell 4.7% on the month.

Systematic diversified funds enjoyed by far the strongest August of any strategy tracked by the HFRX indices, rising 5%—a welcome turnaround from July, when the strategy was the worst performer, losing 4.05% as the average fund rose 1.23%. Systematic diversified funds are up 5.31% on the year.

Convertible arbitrage placed a distant second in August, up 1.56% (5.14% year-to-date), followed by macro (1.45% in August, down 1.53% YTD) and fundamental growth funds (1.32%, down 4.24% YTD).

Multi-strategy relative value is the strongest strategy through eight months, up 5.83% on the year after adding 0.74% in August.

On the other hand, equity market neutral funds were anything but last month, dropped 3.78% to wipe out the average fund’s year-to-date gains, leaving the HFRX index down 1.81%. Also losing ground in August were absolute return funds (down 0.84% in August, down 2.14% YTD), fundamental value funds (down 0.83%, down 0.46% YTD) and special situations funds (down 0.78%, down 0.21% YTD).


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Editor's Note