Saturday, September 10, 2011

Hedge funds outperform global markets in August

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The Eurekahedge Hedge Fund Index was down 1.95%1 in August. Even so, this loss marked a month where managers delivered significant outperformance and downturn protection in a highly volatile environment, as witnessed by the MSCI World Index falling 7.25%2 as market sentiment turned bearish across the globe. These sentiments were the result of the debt situation in Europe, a bleak outlook on global economic growth and the downgrade of US government debt by Standard and Poors. While global markets changed directions frequently during the month, hedge funds were able to deliver the 5.30% outperformance (compared to the MSCI World Index) as gains on the short side offset losses. Protective positions in safe haven assets also helped to prevent heavy losses.

Key highlights for August:

* Hedge funds outperformed global markets3 by 5.30% in August

* Macro hedge funds gained 1.12% during the month

* Early reporting funds suggest positive net asset flows in August, despite market turbulence

* Arbitrage, distressed debt, event driven, long/short equity and relative funds witnessed their fourth consecutive month of negative returns

2 comments:

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