Hedge funds lagged markets but still drew $4.5B in August

Hedge funds were outperformed by some of the major market indexes in August but still attracted $4.5 billion in net inflows last month — double the flows recorded in July, according to consulting firms Hennessee Group LLC and Eurekahedge Pte Ltd.. The Hennessee Hedge Fund Index, which represents more than 3,500 hedge funds, advanced 1.85% in August, while the Eurekahedge Hedge Fund Index, which tracks more than 2,000 funds, gained 1.1%. By comparison, the S&P 500 was up 3.36%, the Dow Jones Industrial Average increased 3.54%, the Nasdaq Composite Index posted a 1.54% gain, and the Barclays Aggregate Bond Index advanced 1.04% in August. “There was good economic news released in August, specifically housing and manufacturing data,” said Charles Gradante, co-founder of Hennessee Group. “But government spending continues to drive demand, while the private sector has been largely absent.”