The bloodbath continued for hedge funds in August as they struggled to come to terms with whipsaw markets, driven by investor fear of economic uncertainty in Europe and the US.
The bloodbath continued for hedge funds in August as they struggled to come to terms with whipsaw markets, driven by investor fear of economic uncertainty in Europe and the US. According to Eurekahedge, Asia ex-Japan hedge funds ended the month down -.94 per cent, leaving them down 4.74 per cent YTD and no doubt praying for more benign markets in the four remaining months of 2011. Nevertheless, they still outperformed underlying markets, the MSCI World Index falling nearly 7 per cent, and the MSCI AC Asia Pacific Index falling 10 per cent. Japan hedge funds fared better, restricting losses to 1.38 per cent to leave them just above zero (+0.09 per cent) YTD. They managed to outperform the Nikkei 225 by around 8 per cent. Early figures posted by Eurekahedge show that within Asia ex-Japan, equity l/s funds lost 6.13 per cent to leave them down 6.09 per cent for the year. Perhaps unsurprisingly, CTA funds were able to exploit short-term market dislocations. They gained 3.3 per cent to leave them up 1.5 per cent in 2011. Event driven and fixed income funds lost approximately 3 per cent and 2 per cent respectively. For hedge funds, globally, August proved to be one of the worst performing months since Lehman’s collapse in 2008.
