Hedge funds gained 1.09 per cent in August, according to the Barclay Hedge Fund Index compiled by BarclayHedge.
The index is up 4.20 per cent year to date.
“Equity prices moved mostly higher in August in spite of economic data calling for a continued slowdown in growth,” says Sol Waksman, founder and president of BarclayHedge. “Investors appeared to be betting on further stimulus from central banks, and recent actions from the Fed and the ECB have proven them right.”
In August, 16 of Barclay’s 18 hedge fund indices had gains. The Barclay Equity Long Bias Index led the way with a 1.95 per cent return, the Event Driven Index gained 1.91 per cent, distressed securities added 1.67 per cent, and the Healthcare & Biotechnology Index was up 1.42 per cent.
On the losing side of the ledger, the Equity Short Bias Index fell 3.26 per cent, and Pacific Rim equities were down 0.27 per cent.
“Concerns about a weakening Chinese economy, earning misses by Korean companies, and declining Japanese exports to Europe have had a negative impact on markets in the Pacific Rim,” says Waksman.
Equity short bias has lost 12.42 per cent year to date, and is the only hedge fund strategy with a negative return in 2012.
“It’s been a volatile year for hedge funds trading the short side of the market, with a 9.21 percent loss in January, a 10.04 per cent gain in May, and a lot of chop in-between those two extremes,” says Waksman.
The Healthcare & Biotechnology Index has been the strongest performer in 2012, with a gain of 10.76 per cent after eight months. Convertible arbitrage is up 6.78 per cent, fixed income arbitrage has added 6.26 per cent, and the Equity Long Bias Index has gained 5.73 per cent.
The Barclay Fund of Funds Index gained 0.67 per cent in August, and is up 2.42 per cent in 2012.