Opalesque Industry Update: Hedge funds gained 1.09% in August, according to the Barclay Hedge Fund Index compiled by BarclayHedge. The Index is up 4.20% 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% return, the Event Driven Index gained 1.91%, Distressed Securities added 1.67%, and the Healthcare & Biotechnology Index was up 1.42%.
On the losing side of the ledger, the Equity Short Bias Index fell 3.26%, and Pacific Rim Equities were down 0.27%.
“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% 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 percent 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% after eight months. Convertible Arbitrage is up 6.78%, Fixed Income Arbitrage has added 6.26%, and the Equity Long Bias Index has gained 5.73%.
The Barclay Fund of Funds Index gained 0.67% in August, and is up 2.42% in 2012.