Hedge funds lost 2.45 per cent in August, according to the Barclay Hedge Fund Index compiled by BarclayHedge. The Index remains up 0.23 per cent year to date.
“A surprise currency devaluation by the People’s Bank of China on August 11 was interpreted by investors as an indication of a weakening economy, and sparked a global sell-off of risk assets,” says Sol Waksman (pictured), founder and president of BarclayHedge.
Fifteen of Barclay’s 18 hedge fund indices had losses in August. The Emerging Markets Index dropped 5.39 per cent, its largest loss since May of 2012 when it dropped 5.39 per cent. Emerging Markets have fallen 10.46 per cent in the past three months.
“Emerging markets were hit especially hard as concerns of a global slowdown provoked fears of contagion and triggered sell-offs in commodities as well as Asian currencies, credits, and equities," says Waksman.
Healthcare & Biotechnology lost 4.38 per cent in August, Distressed Securities fell 4.28 per cent, and the Equity Long Bias Index was down 3.37 per cent.
The Equity Short Bias Index was the big winner in August, with an 8.75 per cent gain. Equity Market Neutral was up 0.42 per cent, and Fixed Income Arbitrage added 0.12 per cent.
At the end of August, the Healthcare & Biotechnology Index is up 9.96 per cent for the year, Pacific Rim Equities have gained 5.19 per cent, Merger Arbitrage is up 4.74 per cent, and European Equites have gained 4.39 per cent.
The Distressed Securities Index has lost 5.63 per cent year to date, Emerging Markets are down 3.15 per cent. and the Event Driven Index has lost 0.53 per cent.
The Barclay Fund of Funds Index lost 2.10 per cent in August, but is still up 0.92 per cent in 2015.