Hedge funds falter in January

Hedge funds started off 2008 on a sour note due to steep declines in global equities and growing concerns over a U.S recession, according to a report issued by Eurekahedge. The composite Eurekahedge Hedge Fund Index fell 3.1% in January after rising 0.7% in December, the worst one month performance since the Singapore-based hedge fund tracking company began keeping data in January of 2000. The MSCI World Index fell 7.7% for the month stemming from steep declines in global equities causing hedge fund managers to tighten borrowing, the Eurekahedge report said. The January slump was spread throughout the world with all regions suffering losses including the Eurekahedge Asia excluding-Japan Hedge Fund Index (-6.6%), the Japan Hedge Fund Index (-3.4%), European Hedge Fund Index (-2.4%), North American Hedge Fund Index (-1.6%) and the Latin American Hedge Fund Index (-1.1%). Despite expected continued volatility in the coming months, hedge fund performance is expected to rebound in the near-term as recent interest rate cuts by the Federal Reserve begin to take effect, according to the Eurekahedge report.