Mixed Results For Hedge Funds In August

Sep 10 2010 | 1:07pm ET

August was an uneven month for hedge funds, according to early estimates from the Dow Jones Credit Suisse Hedge Fund indices.

Some strategies did very, very well, and some did not. Of the 13 strategies and substrategies tracked by the indices, six were in the black and seven in the red last month. All told, the results added up to a 0.22% return for the Dow Jones Credit Suisse Hedge Fund Index, which is up 2.46% on the year.

Unsurprisingly, short-bias funds did very well in a month that saw the Standard & Poor’s 500 Index plunge 4.7%. The strategy rose an estimated 5.11% to cut its year-to-date loss to 1.4%. Managed futures funds weren’t far behind with a 4.96% return, pulling it out of the red for 2010 at 3.64%.

Global macro funds added 2.57% on the month (7.56% year-to-date). Convertible arbitrage funds were up 1.37% (6.37% YTD), and fixed-income arbitrage funds were up 1% (7.84% YTD). Event-driven multi-strategy funds returned 0.57% on the month (3.84% YTD).

The more numerous losers were “led” by equity market neutral funds which, despite their name, followed equities down in August. The strategy fell by an estimated 2.33% and is down 5.2% on the year.

While market-neutral funds were the worst of the month, they weren’t alone in the red. Long/short equity funds fell 1.39% (down 2.15% YTD), risk arbitrage funds 0.8% (up 0.65% YTD), event-driven funds 0.69% (up 2.71% YTD), emerging markets funds 0.5% (up 2.18% YTD), distressed funds 0.49% (up 3.6% YTD) and multi-strategy funds 0.46% (up 1.67% YTD).

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