Funds Hub

Money managers under the microscope

from Jeremy Gaunt:

Getting there from here

Depending on how you look at it, August may not have been as bad a month for stocks as advertised. For the month as a whole, the MSCI all-country world stock index  lost more than 7.5 percent.  This was the worst performance since May last year, and the worst August since 1998.

But if you had bought in at the low on August 9, you would have gained  healthy 8.5 percent or so.

In a similar vein, much is made of the fact that the S&P 500 index  ended 2009 below the level it started 2000, in other words, took a loss in the decade.

That completely ignores, however, a more than doubling of the index between 2002 and 2007.

Hedge funds, take heart!

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Many commentators have written the obituary of the hedge fund industry, or of some of its more esoteric or leverage-dependent strategies, during the credit crisis.

rtr257fkSo it may be of some encouragement to see a new launch by Invesco Perpetual, announced today.

VW drops as hedge funds move in

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Volkswagen ordinary shares are down today after yesterday’s report of increased short positions.

rtr26v0yStock out on loan, a good indication of shorting, has doubled over the past month to 2 pct of total issuance, according to figures from Dataexplorers.

Time to crack open the champagne?

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May was a bumper month for the battered hedge fund industry with an impressive 5.23 percent return, the best monthly gain in almost a decade.

rtr244m8The data, from Hedge Fund Research, takes returns for the first five months of the year to 9.43 percent. After last year’s record losses, this is a much healthier figure and more reminiscent of the returns during the industry’s boom years such as 1999 or 2003.

Returns and Reckonings

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It may be the awakening we all experience in the spring, but this month two different class actions against previous financial giants were started by a bunch of pension schemes. In both cases a small group of such previously semi-obscure institutions have de facto come under the spot light for suing companies– and their executives– which they say have been less than straight about their financial shape and lost them millions.

 

rtxbi7hEarlier this week five schemes, including Europe’s second largest one, clubbed to become lead plaintiff in a class action over about $274 million losses incurred since Bank of America took over Merrill Lynch.

Bouncebackability

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rtr1rmafHedge fund returns have bounced back in January after their bleak 2008.

Data from Hedge Fund Research shows they returned 0.39 percent in January, having lost 18.73 percent in 2008, although they gained 0.21 percent in December.

The start of a revival in hedge fund returns? Well, maybe, and maybe not.

One explanation is that returns are just bouncing back after losses were exacerbated by redemptions late last year.

from Global Investing:

For better or worse?

Wealth managers at Citi Private Bank are telling their clients to stay neutral in their exposure to hedge funds at the moment, whether the strategy be event driven, equity long/short or macro. The main reason is that capital markets are still stressed and many hedge funds still need to deleverage.

The firm points out, however, that hedge funds had a good news-bad news kind of year in 2008. Based on the HFRX Global Hedge Fund Index, it was the worst performance on record. The index lost 23.3 percent. Its next worst performance was 2002 -- and that was only a 1.5 percent decline.

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