The Hennessee Hedge Fund Index declined 3.38% in August (-1.92% YTD), while the S&P 500 declined 5.68% (-3.08% YTD), the Dow Jones Industrial Average fell -4.36% (+0.31% YTD), and the NASDAQ Composite Index decreased -6.42% (-2.78% YTD).
Bonds rallied amid the volatility, as the Barclays Aggregate Bond Index advanced 1.46% (+5.90% YTD) and the Barclays High Yield Credit Bond Index fell 4.00% (+1.95% YTD).
“August was a very challenging month for hedge funds as they were once again ‘whipsawed’. Hedge funds were forced to reduce exposure in order to limit losses as the financial markets plummeted. They then underperformed as the markets rallied back strongly into month end,” says Charles Gradante (pictured), Co-Founder of Hennessee Group. “Markets continue to be driven by fear, resulting in high correlation among asset classes. The result is one of the most challenging investment environments for hedge funds on record since inception of the Hennessee Hedge Fund Indices in 1987.”