Stocks Lift Hedge Funds in August

EDHEC-Risk Institute shows winners and losers in August.

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1262623_hot_air_balloonHedge funds got a boost in August as stocks extended their winning streak according to new data from the EDHEC-Risk Institute. As the S&P 500 returned 2.25% and hit a one year high, riskier fixed income instruments remained strong performers and commodities clocked an impressive performance, the data shows some hedge fund strategies exposed to the equity risk factor improved performance compared to the previous month. In particular, the data shows a boost for Long/Short Equity: 1.02%, Equity Market Neutral: 0.75%, Event-Driven: 1.38%. See the chart below for a view of hedge fund performance for the year.

Other highlights include:

Non-directional strategies showed significant idiosyncratic performance indicative of a possible timing effect.

Convertible Arbitrage returned a steady 0.64%, with strong sensitivities to credit and convertible bonds outweighing a slight short exposure to equities.

CTA Global (-0.90%) suffered from an increased dynamic exposure to the Dollar.

The Funds of Funds index, finally, continued to recover thanks to a 0.93% gain, and is approaching its high for the year.

Chart: EDHEC-Risk Institute Hedge Fund Returns (click image to enlarge)

EDHEC 3

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