JWH Win Streak Ends In July

Aug 17 2007 | 11:47am ET

No stranger to drawdowns, John W. Henry & Co. last month saw its winning streak snapped at three and chalked up another one on the loss column. The firm’s Financial & Metals portfolio “led” the way, dropping 11.66%, followed by the International Foreign Exchange program, which was down 8.01%.
 
Not unlike its hedge fund peers, the firm’s programs were victimized by “concerns about strains in the U.S. housing market, exposure to sub-prime mortgages and excess leverage in the financial system resurfaced prompting investors to reduce positions in ‘risky assets,’” according to Kenneth Webster, president and chief operating officer, in his monthly investor letter.

“Trends in global bonds and equities were halted in July when problems in the U.S. housing and sub-prime mortgages spread throughout the global financial markets,” Webster penned. “This contagion led to a broad-based reduction in risk. Diversifications and risk management techniques helped to minimize losses in this difficult environment.”

Webster also optimistically scribed, “It is hard to know where the markets go from here but it is quite possible that elevated levels of volatility will persist in certain markets, which could be a positive development for JWH’s style of trading.”

The firm’s assets under management currently stand at $521 million.

It’s not been a good month or so for JWH founder John Henry: The fortunes of the Boston Red Sox owner’s investments seem strangely correlated with those of his baseball team. For months comfortably ahead of their struggling rivals, the New York Yankees, the Sox have seen their once-double-digit lead over the Bronx Bombers cut to—Holy Cow!—just five-and-a-half games.


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