Seven out of ten strategies in the Dow Jones Credit Suisse Hedge Fund Index posted positive performance in August as managers generally remained cautiously positioned with relatively low portfolio risk levels.
The index gained 0.23 per cent in August and is up 2.46 per cent year-to-date.
Many managers used equity hedges to protect their portfolios from continued volatility in equity markets. In comparison, the Dow Jones World Index was down 3.62 per cent in August, and has fallen 6.08 per cent year-to-date amid concerns over the weakening pace of global economic growth.
Tactical strategies with broad investment spectrums such as managed futures and global macro were among the best performers in the index, posting gains of 4.87 per cent and 1.48 per cent respectively. Performance in these sectors was largely led by profitable positions in the fixed income space.
Long/short equity mangers posted some of the worst performance, finishing down 1.12 per cent. US focused long/short equity funds experienced some of the most significant losses as the Dow Jones Industrial Average fell 4.31 per cent.
The event driven sector posted slightly negative performance this month finishing down 0.40 per cent as directionally long positions from credit and equity strategies sustained modest losses. The risk arbitrage sub-sector was the only sector to finish up (0.31 per cent) as M&A activity continued despite weak macro-economic data.