August Blows Have Hedge Funds Reeling

Sep 6 2013 | 4:08am ET

August was a minor bloodbath for the hedge fund industry, with the average fund falling 0.86%, according to Hedge Fund Research, and only one substrategy managing a positive return for the month.

The HFRX Global Hedge Fund Index is up 3.03% on the year after August's decline. Fifteen of the suite's 16 strategy and substrategy indices also suffered losses on the month, with only distressed restructuring in the black—and barely so, at just 0.09% (4.14% year-to-date).

Equity hedge funds led the decline, falling 1.89% in August (up 5.24% on the year). Fundamental value funds were especially hard-hit, losing 2.1% (up 9.49% YTD), but equity-market neutral (down 1.61% in August, down 0.43% YTD) and fundamental growth (down 1.55%, down 1.34% YTD) were not far behind.

Emerging markets funds fell an average of 1.8% to cut their year-to-date gains to 0.49%. Master-limited partners—still the year's best performer at 16.99%—shed 1.51% on the month.

Macro funds and commodity trading advisers lost 0.84% in August (up 1.3% YTD), with systematic diversified CTAs doing a good deal better, down just 0.08% (down 3.46% YTD). Event-driven funds lost 0.54% (up 8.59% YTD), as special-situations funds dropped 0.78% (up 10.91% YTD) and merger-arbitrage funds 0.03% (up 2.42% YTD). Credit funds dropped 0.49% (up 5.12% YTD). Relative-value arbitrage funds shed 0.13% (up 1.3% YTD), with convertible-arbitrage funds down 0.49% (up 9.13% YTD) and multi-strategy funds 0.08% (down 0.19% YTD).


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Editor's Note