Hedge funds continue slow downhill roll

The latest performance data from the hedge fund industry shows that its indexes continue to decline at a slower pace than that of the stock market, but are still widely underperforming bonds.
DEC 08, 2008
The latest performance data from the hedge fund industry shows that its indexes continue to decline at a slower pace than that of the stock market, but are still widely underperforming bonds. The Hennessee Hedge Fund Index fell 2.7% in November for an 11-month decline of 18.4%. The Credit/Suisse Tremont Hedge Fund Index lost 0.7% in November and is down 16.1% this year. The HFRI Weighted Composite Index was down 1.4% in November and lost 17.8% over the first 11 months of the year. This compares to Standard & Poor’s 500 stock index, which lost 7.5% in November and is down 38.9% this year through November. Meanwhile, the Lehman Aggregate Bond Index gained 3.3% in November and is up 1.5% from the start of the year. “While not an attractive absolute return, many investors are thankful to have hedge fund allocations this year, especially when compared to traditional asset classes,” Lee Hennessee, managing principal of Hennessee Group LLC, said in a statement. Hedge fund industry performance data are based on information that is voluntarily provided by hedge fund managers, which helps explain why performance can vary from one index to another. The general trends among the indexes showed that short-biased and global macro strategies have been the strongest this year. In the HFR Index, for example, the short-biased hedge fund strategies averaged a 5.5% gain in November for a year-to-date gain of 31.5%. The same index’s global macro funds were up 1.7% in November and 5% from the start of the year.

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