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Structured credit hedge funds see smaller declines in August

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Both gross and net monthly returns were negative in August for the Palomar Structured Credit Hedge Fund Index compiled and calculated by Palomar Capital Advisors, but the rate of decline i

Both gross and net monthly returns were negative in August for the Palomar Structured Credit Hedge Fund Index compiled and calculated by Palomar Capital Advisors, but the rate of decline in the index measures slowed from the previous month.

The index recorded a gross decline of 1.62 per cent and a net decline of 1.74 per cent, compared with losses of 2.14 per cent and 2.27 per cent respectively in July, with 11 out of 24 funds reporting positive results for the month. However, the gross and net indices continue to show declines so far in 2008 of 6.92 and 8.73 per cent respectively.

The declines posted in August by opportunistic, long junior value-oriented and multistrategy funds were marginally offset by gains in the relative value and correlation strategies. The dispersion of returns during the month remained high.

The Palomar Structured Credit Hedge Fund Index, which is published by Structured Credit Investor, seeks to represent the risk and return of open investible structured credit hedge funds, in terms of both gross and net asset value. It currently comprises 24 constituent funds with USD11.9bn in assets under management.

Zurich-based Palomar Capital Advisors is an independent financial advisory firm specialising in structuring, managing and placing credit-related alternative investment products.

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