Performance Scattered During August


New data suggests most hedge funds strategies posted negative performance in August, but a select few really soar.

August was a volatile month for the markets as the European debt crisis lingered on. Equities whipsawed all over the place while gold continued its mercurial rise, nearing $2000 an ounce. Currencies were also more volatile than usual.

This type of market dynamic did not fare well for some hedge fund strategies. IndexIQ’s IQ Hedge family of benchmark hedge fund replication indices saw long/short equity drop 3.63 percent. The IQ Hedge Emerging Markets Beta Index fell 3.57 percent for the month.

The IQ Hedge Global Macro Beta Index, however, posted strong performance of nearly 4 percent for August, bringing its year-to-date gains above 9 percent.

Jim Simons’ Renaissance Technologies flexed its quantitative muscle in August, adding 5.4 percent gains to its Renaissance Institutional Equities Fund, which is reportedly up over 25 percent year-to-date. Ping Capital’s Exceptional Value Fund lost 4.8 percent last month but is up 8.2 percent for the year.

As far as other benchmark indices go, the Eurekahedge Hedge Fund Index was down 1.95 percent in August. However, Eurekahedge indicated that hedge funds employing a macro strategy gained 1.12 percent for the month, signaling a comeback for macro and global macro funds whilst other strategies lag behind.

Some large hedge funds have stopped accepting money from outside investors due to concerns about navigating markets under large pools of capital. Hedge fund legend George Soros recently returned all outside money, effectively turning Soros Capital Management into a family office.

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