HFR: Hedge Funds Down 1.4% In Nov.

Dec 10 2007 | 12:52pm ET

November was not a good month for hedge funds. But the numbers make one thing clear: It was no August.

Hedge funds sank 1.4% last month, according to Hedge Fund Research, dragged down by poor performance in some of the year’s most successful strategies. Among the hardest hit were the HFRI Emerging Markets index, which declined 2.76% in November (but remains up a staggering 22.54% year-to-date) and the HRFI Sector: Technology, which declined 3.97% (up 15.38% YTD).

In fact, just five HFRI strategies were in the black last month, led by short-selling, which has had very little to cheer about this year until now: A 6.52% surge that puts the strategy back in the black, year-to-date, at 4.39%. Other strategies posted more marginal gains, with fixed-income returning 0.79% on the month (3.95% YTD), health care and biotechnology 0.74% (12.03% YTD), equity-market neutral 0.59% (5.56% YTD) and relative value 0.48% (9.31% YTD).

Within emerging markets, the year’s biggest winners were the month’s biggest losers. Asia hedge funds fell 3.41% (up 33.43% YTD), while Latin America funds declined by 3.49% (up 15.23% YTD).

Also posting sizeable declines were market-timing (down 2.8% in November, up 8.47% YTD), energy (down 2.15%, up 16.31% YTD), event-driven (down 2.12%, up 7.32% YTD) and distressed securities (down 1.61%, up 5.8% YTD).

Investable hedge funds were much harder-hit, as HFR’s HFRX indices show. Overall, investable funds dropped 2.41%, leaving them up just 4.37% year-to-date. Among individual strategies, only equity-market neutral posted a gain last month, rising 0.15% to 2.42% on the year. On the other side of the coin, equity hedge fell 3.67% (up 3.67% YTD), event-driven 2.97% (up 5.63% YTD) and convertible arbitrage 2.73% (up 1.25% YTD).


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