Hedge funds were bruised but not broken by this month's dizzying market volatility, according to Credit Suisse and Dow Jones Indexes.
The Dow Jones Credit Suisse Core Hedge Fund Index fell 3.66% through Wednesday, Aug. 10, increasing its year-to-date loss to 4.54%. But those losses were positively modest compared to the 13% that the Standard & Poor's 500 Index fell during the same period.
"Despite challenging conditions, hedge funds appear to have so far been effective in their attempt to provide a level of capital preservation, and overall have limited losses relative to perceived riskier asset classes such as equities," Oliver Schupp of the Credit Suisse Index Co. said.
Six of the seven strategies tracked by Credit Suisse and Dow Jones were in the red during the first third of August, with only managed futures funds escaping with a 1.83% gain (0.82% year-to-date). Long/short equity and event-driven funds were hardest hit, losing 6.55% (down 6.22% YTD) and 5.08% (down 7.83% YTD), respectively.
Emerging markets funds slid into the red with a 3.8% drop (down 0.32% YTD), while global macro funds lost a further 3.38% (down 7.42% YTD). Convertible arbitrage funds lost an average of 2.75% (down 2.89% YTD) and fixed-income arbitrage funds 0.56% (up 1.46% YTD).