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Opalesque Exclusive: Hedge fund indices for July average -2.17% (estimated): Will jittery investors evaluate hedge fund investments month by month, or by the larger credit cycle? From Kirsten Bischoff, Opalesque New York: As noted in Opalesque’s roundup of hedge fund indices last Friday (see coverage: here) the average industry estimated and approximate return for July was -1.84% (and -2.17% if you include the Eurekahedge HF Index(see below)).

However, asset classes cannot be ranked within a vacuum and as the global credit crunch continues, the argument can be made for the prudent investor to take a step back and review hedge fund industry performance in terms of market cycle and not on a month-by-month basis.

The credit crunch at large The global economy is experiencing a period of serious deleveraging and systemic risk and a market environment has emerged to which the relatively new hedge fund industry has no historic reference. “The hedge fund industry did not exist in the 1930’s or the 1970’s so it is very difficult to say how hedge funds should do in this type of environment,” says Steve Gross, Principal at Penso Capital Markets.

Although this clearly marks the toughest time for hedge funds, the DJIA has pos......................

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