Mon, Dec 22, 2014
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. Investing - Big hedge funds win again on PetSmart, Riverbed, RBS sells real estate loans to hedge fund Cerberus, Talisman energy speculation: Which hedge funds could benefit?[more]

    Big hedge funds win again on PetSmart, Riverbed From CNBC.com: Another week, another set of wins for activist investors. On Sunday, pet supply retailer PetSmart agreed to the largest leveraged buyout of the year at $8.7 billion. Hedge fund firm JANA Partners had been pushing for a sale a

  2. Outlook - Hedge fund manager who remembers 1998 rout says prepare for pain, Bond guru Bill Gross predicts U.S. economic growth to dip to 2%[more]

    Hedge fund manager who remembers 1998 rout says prepare for pain From Bloomberg.com: Stephen Jen landed in Hong Kong in early January 1997 as Morgan Stanley’s newly minted exchange-rate strategist for Asia. He was soon working around the clock when investors began targeting the region’s

  3. Investing - Hedge funds get boost from healthcare in 2014, Paulson & Co takes stake in Salix on heels of inventory issues[more]

    Hedge funds get boost from healthcare in 2014 From Valuewalk.com: The healthcare sector started the year on a turbulent note, as stocks of many major biotechnology companies were battered. However, most of the players in this sector have bounced back. The BarclayHedge Healthcare & Biotec

  4. North America - Why Steve Cohen, Connecticut hedge fund billionaire, gives so much in New York[more]

    From Insidephilantrophy.com: Billionaire Steve Cohen was born in Great Neck, New York before attending Wharton, working on Wall Street and then founding SAC Capital Advisors in Connecticut. Though his company (Point72) and foundation are based in Connecticut, Cohen and Alexandra are deeply connected

  5. Investing - Soros buys a highly speculative biotech in the third quarter[more]

    From Fool.com: …The Soros Fund bought 25,000 shares of the struggling small-cap biopharma Aegerion Pharmaceuticals in the third quarter. For those of you who haven't heard of this name, suffice to say that this was a surprising buy in light of the company's recent problems and poor outlook going for