Hedge funds lost another 2.34% in November and are down an unprecedented 20.63% since June, according to the Barclay Hedge Fund Index.
“The past six months of losses have been the worst on record for the hedge fund industry,” said Sol Waksman, founder and president of BarclayHedge. “Prior to 2008, the longest string of consecutive losing months was three. Hedge funds lost 4.25% from September through November of 2000, and then 3.30% from July through September of 2001.”
Many hedge fund strategies experienced significant losses in November. Barclay’s Equity Long Bias Index dropped 4.81%, healthcare and biotechnology fell 4.50%, the Emerging Markets Index was down 4.22% while convertible arbitrage lost 3.69%. Emerging markets has been the worst-performing strategy in 2008, losing 39.34% year-to-date. Equity Long Bias is down 28.81%, and Convertible Arbitrage has lost 28.02%.
“Early in 2008, there was a great deal of discussion about how emerging markets had ‘decoupled’ from developed markets,” said Waksman. “The current economic environment has clearly demonstrated that when consumption decreases in developed nations, exporting nations also feel the pain.”
Four of Barclay’s 16 hedge fund indices provided positive returns in November. The Barclay Equity Short Bias Index gained 3.51%, and is up 43.76% in 2008. Barclay’s Global Macro Index rose 1.47% in November, Pacific Rim equities gained 0.23%, and equity-market neutral was up 0.13%. Equity-market neutral is now down just 0.98% for the year, and global macro has a loss of 1.32%.
Through November, the Barclay Hedge Fund Index has fallen 21.27% in 2008, compared to a loss of 37.66% in the S&P 500.
The Barclay Fund of Funds Index was down 1.64% in November, and has lost 20.04% year to date.