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November 28, 2005
Hedge fund returns bounce in November
European hedge fund returns have risen in November, recovering along with equity prices from a slide in October, the worst month for hedge fund performance since August 1998, said EuroHedge on Friday.
The trade publication is not due to release its index of hedge fund returns for November until the end of December. But its managing editor said Novembers numbers are up so far.
For October, the EuroHedge Composite Index fell 1.17 percent, according to figures recently published on the EuroHedge Web site. That compared with a fall of 2.79 percent in August 1998 as the emerging market crisis sparked by Russian default drained liquidity.
For the 10 months to end-October, the index is still up 5.92 percent compared with 5.95 percent for all of last year. Between June and September, the index rose around 1.25 percent a month on average.
"They had a strong run between June and September, and there was a correction in October when there was an equity reversal," Neil Wilson, managing editor at EuroHedge, told Reuters. "October losses have mostly been recovered."
That is because most equity price rose in November.
Before the November rally, EuroHedge's indexes that specifically measure the performance of equity hedge funds still show returns of more than 7 percent for the year to end-October.
Data from Chicago-based Hedge Fund Research, which publishes daily returns, shows performance improved in November. Average hedge fund returns are up more than 1.5 percent so far this month, compared with losses of around 1.8 percent in October.
One of the worst performers this year has been the managed futures strategy, which makes trend bets on stocks, bonds, commodities and currencies on the basis of computer models that give out buy or sell signals.
Managed futures funds lost 1.47 percent in October and gained only 1.43 percent in the first 10 months of the year, according to EuroHedge.
Currency funds have also found it difficult to make money this year. The EuroHedge currency hedge fund index was up around 0.3 percent in October and up only 1.86 percent for the 10 months.
Hedge fund analysts say that is because currency funds have been on the wrong side of the dollar's uptrend for most of this year and that they also misjudged the timing of the revaluation of the Chinese yuan earlier this year.
-Reuters-
Posted by su at November 28, 2005 11:56 AM