Sat, Dec 10, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Morningstar 1000 Hedge Fund Index rose 0.1% in August, only merger arb funds saw inflows

Thursday, September 23, 2010
Opalesque Industry Update - Morningstar, Inc., a provider of independent investment research, reported preliminary hedge fund performance for August 2010 and asset flows through July. Hedge funds held up in August, as the Morningstar 1000 Hedge Fund Index rose 0.1% and the currency-hedged Morningstar MSCI Composite Hedge Fund Index increased 0.6% against a decline in global equity markets, particularly in the United States. The Morningstar U.S. Equity Hedge Fund Index fell 2.4%, approximately half as much as the S&P 500. Hedge funds specializing in small-market-capitalization stocks hedged even more effectively. The Morningstar U.S. Small Cap Equity Hedge Fund Index dropped 1.5% versus the Russell 2000 Index's 7.4% dive this month.

"Riskier assets such as equities have moved in concert either up or down over the last several months, a trying environment for many hedge fund strategies," said Nadia Papagiannis, alternative investment strategist for Morningstar. "But hedge funds effectively preserved capital in August."

August was characterized by a general selloff in risky assets, not just equities, after the Federal Reserve confirmed weakness in the U.S. economy early in the month. Investors flocked toward the safety of U.S. Treasuries, driving down interest rates to historic lows and prices on bonds higher. Price-trend following managed futures funds capitalized on the upward trend in Treasury futures, which resulted in a 3.5% climb in the Morningstar Global Trend Hedge Fund Index in August. Trend-following strategies have suffered for most of 2010, but August's results pushed many of these funds into the black. Along with government bonds, precious metals benefited from investors' flight from risk, a profitable theme for several macro-economic oriented funds in Morningstar's Global Non-Trend Hedge Fund Index.

Fixed-income hedge fund strategies also profited from risk-aversion trades. The Morningstar Global Debt Hedge Fund Index grew 1.3% in August. Even though riskier credits underperformed in August, convertible arbitrage strategies were able to post gains, primarily due to high volatility. The Morningstar Convertible Arbitrage Hedge Fund Index increased 1.0%. And even though equity markets tanked in general, merger activity picked up steam. The Morningstar MSCI Merger Arbitrage Hedge Fund Index rose 1.0% in August.

For the year to date through July, funds in Morningstar's Corporate Actions Hedge Fund Index, which also engage in merger arbitrage, received large inflows of $2.3 billion. Global Non-Trend funds also experienced inflows, of $2.6 billion. Most other hedge fund categories suffered outflows in 2010, especially multi-strategy funds.

(press release)

Source

kb

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Institutions - Texas County & District culls 5 hedge funds, reallocates to existing managers, Kentucky board gives final approval to halve hedge fund portfolio, $38bn Finnish fund moves assets to U.S. as Europe flounders, South Korea’s National Pension Fund holds 5% stake in 62 listed companies[more]

    Texas County & District culls 5 hedge funds, reallocates to existing managers Texas County & District Retirement System, Austin, continues to reduce the number of hedge funds, but not the size of its $6.2 billion hedge fund portfolio. It will redeem a total of $760 million from five hedg

  2. Opalesque Roundtable: Australian family offices search for good risk adjusted returns, happy to pay for skill[more]

    Komfie Manalo, Opalesque Asia: Australian family offices want foremost good risk adjusted returns, and they are happy to pay for the skill, and in some cases, the limited capacity of an active manager. Jonas Daly, Head of Distribution at B

  3. StepStone announces close of Swiss Capital acquisition[more]

    StepStone Group LP announced it has successfully closed the acquisition of Swiss Capital Alternative Investments AG, one of the leading private debt and hedge fund solutions providers in Europe. The transaction was originally announced in May 2016, and has been in the process of receiving regulatory

  4. Investing - Stephen Cohen investing $275m in free clinics treating veterans' mental health issues, California Resources loses favor with hedge funds[more]

    Stephen Cohen investing $275m in free clinics treating veterans' mental health issues From Healthcarefinancenews.com: …Now, a new chain of free mental health clinics for vets has opened in five cities across the United States to fill the gap. The much-needed new treatment is underwritten

  5. Hedge funds flat in last week of November 'in sympathy with markets’[more]

    Komfie Manalo, Opalesque Asia: Hedge funds were close to flat in the last week of November in sympathy with markets, which took a pause ahead of the OPEC meeting and Italian referendum. The Lyxor Hedge Fund Index was -0.1% as of end November 29 (-1.7% YTD), according to the latest