High-Flyers Stumble, Short-Sellers Rally In Nov.

Dec 18 2007 | 11:00am ET

Worldwide market troubles led to a rough month for the year’s best performing strategies in November. According to the Credit Suisse Index Co., the two strongest strategies year-to-date fared the worst last month.

Event-driven multi-strategy funds shed an average of 1.94% in November, leaving it up 16.24% on the year. Emerging markets, which have led the way for much of the year—and which enjoyed the best October of any strategy tracked by CS—dropped 1.85%, but remains the best-performing strategy of 2007 at 18.7% year-to-date.

Overall, the Credit Suisse/Tremont Hedge Fund Index declined by 1.21% last month; it is up 12.04% year-to-date.

“In November, the U.S. continued to show weakness in everything from personal spending and income to construction spending,” CS Index Co. President Oliver Schupp said. “Housing prices in the U.K. fell for the third month in a row, and consumer confidence fell to its lowest level since February.”

With the stock market taking a tumble—the Standard & Poor’s 500 Index lost more than 4% in November, with the Dow Jones World Index down almost 5%—the only two strategies in the black in the CS index were dedicated short-bias and equity-market neutral. The former enjoyed an eye-popping monthly return of 10.31%, pulling it out of the red for the year and leaving it up 5.97% in 2007. The latter returned a much more modest 0.56%, and is up 8.74% year-to-date.

But there were many more losers than winners. Long/short equity fell 1.71% last month (up 13.18% YTD). Event-driven (down 1.68% in November, up 12.84% YTD) and convertible arbitrage (down 1.48%, up 5.59% YTD) also suffered more than most. Other losers included distressed funds (down 1.3%, up 8.29% YTD) and multi-strategy offerings (down 1.14%, up 10.44% YTD).

The Credit Suisse/Tremont Blue Chip Investable Index fell by 1.17%. It is up 7.11% year-to-date.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Versum Materials (VSM), with a market capitalization of $2.7 billion, enables chipmakers to achieve higher performance at lower cost with enhanced reliability. Versum is a leading global provider of electronic materials for the integrated circuit and flat-panel display markets.