September 20, 2010

Hedge Funds Stable in August

However, 'equity-oriented strategies' fell with market

Data from the EDHEC-Risk Institute on Monday found hedge funds remained stable in August, despite market turmoil. The convertible arbitrage strategy gained 1.25% for the third consecutive month, and the CTA global strategy made its most significant increase since November 2009, increasing 3.04%. Other strategies with strong gains include global macro (1.24%) and short-selling (3.27%).

Unsurprisingly, however, equity-oriented strategies fell with the stock market. Equity market neutral fell 0.57%; event-driven fell 0.29%; and long-short equity fell 0.96%.

Greenwich Alternative Investments, another hedge fund index, found similar results. According to Greenwich, convertible arbitrage gained 1.3%. Equity market neutral fell 0.3%; event-driven fell 0.2%; and long-short equity fell 0.9%.

EDHEC-Risk noted that despite reduced exposure to the stock market, the Equity Market Neutral strategy was not the best performer in the group. Fixed income arbitrage gained 0.99%. Greenwich, however, measured a 0.2% gain for fixed income arbitrage.

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