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Portfolio > Alternative Investments > Hedge Funds

Numerology: Turnaround for Hedge Funds

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Following the worst year ever for hedge fund performance, so far 2009 is shaping up as quite a good one. According to Hennessee Group, which has been tabulating its Hedge Fund Index since 1987, in the first half of 2009 the Index rose 11.74%, the strongest six-month performance since 1999, when the Index rose 14.81%.

In announcing the results on July 10, Hennessee Group’s co-founder, Charles Gradante, noted that the first half of 1999 marked “a strong bull market when the S&P was also experiencing double digit gains.” However, Gradante points out that in the first six months of this year “the S&P has been extremely volatile and has advanced a little less than +2% [actually 1.78%] since January.” That suggests, he says, that hedge fund managers have shown the “ability to generate alpha, via strong stock selection on both the long and short side of their portfolios, while taking on little directional exposure.”


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