Morningstar: Hedge Funds Up Marginally In August

Sep 27 2010 | 2:30pm ET

With September drawing to a close, Morningstar joined the chorus of hedge fund index publishers pronouncing August something of a bust.

The Morningstar 1000 Hedge Fund Index added an anemic 0.1% last month, according to a preliminary report. But it could have been worse: the broader markets took a steep dive in August.

“Riskier assets such as equities have moved in concert either up or down over the last several months, a trying environment for many hedge fund strategies,” Morningstar’s Nadia Papagiannis said. “But hedge funds effectively preserved capital in August.”

Not all hedge funds, mind you: Stock hedge funds dropped 2.4% on the month—itself something a victory, given the drop in stocks last month, but a drop all the same.

On the other hand, global trend-following hedge funds jumped some 3.5% on the month. Debt funds added 1.3%, while both convertible and merger arbitrage funds rose 1% in August.


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