Thursday, January 22, 2009
70% of Hedge Funds Lost Money in 2008; Average Fund Plunges 21.44% in 12 Months
FAIRFIELD, Iowa, January 21, 2009– Hedge funds lost a record 21.44% in 2008 according to the Barclay Hedge Fund Index compiled by BarclayHedge.
“2008 hedge fund losses were widespread, with 70 percent of the funds that report to us ending the year in the red,” says Sol Waksman, founder and president of BarclayHedge.”
“Managers of funds of hedge funds turned in an even poorer performance, with 85 percent finishing in the minus column, losing an average of 21.69 percent.”
Hedge funds began the year holding their own, with the Barclay Hedge Fund Index down just 0.79% through May. But the average fund lost 21.21% from June through November, including a two-month 14.81% decline in September and October when the S&P 500 Index fell 24.21%.
Only one hedge fund strategy was profitable in 2008, and it thrived. The Barclay Equity Short Bias Index turned in a record gain of 41.09% in 12 months, and jumped 20.83% during the September and October stock market plunge.
“With the global economy in a recession and equity markets in a tailspin, being short equities in 2008 was one of the more profitable strategies, second only to being short mortgage backed securities,” says Waksman.
“This was a fairly rare event however, as the overwhelming majority of investors in these sectors are historically net long.”
Hedge fund managers did end the year on an up-tick, as the Barclay Hedge Fund Index gained 0.52% in December, its first monthly gain since May 2008.
“Equity markets recovered as investors began to entertain the notion that the worst may be over for the financial sector,” says Waksman.
Overall, 14 of Barclay’s 18 hedge fund indices regained some ground in December. The Barclay Healthcare & Biotechnology Index jumped 3.31%, Convertible Arbitrage was up 2.86%, Merger Arbitrage gained 1.73%, Pacific Rim Equities was up 1.72%, and Global Macro rose 1.52%.
Click here to view five years of Barclay Hedge Fund Index data, or download 11 years of monthly data.
Sol Waksman is an experienced media source, providing perspectives on hedge fund and managed futures trends. For quotes, commentary or background, call 641-472-3456 or email swaksman@barclayhedge.com.
BarclayHedge (formerly The Barclay Group) was founded in 1985 and actively tracks more than 6,600 hedge funds, funds of hedge funds, and managed futures programs. Barclay has created and regularly updates 18 proprietary hedge fund indexes and eight managed futures indexes.
Institutional investors, brokerage firms and private banks worldwide utilize BarclayHedge data as performance benchmarks for the hedge fund and managed futures industries.
Labels: BarclayHedge press release, hedge funds
Tuesday, January 20, 2009
Barclay CTA Index Gains 13.90% in 2008; Trending Markets Boost Managed Futures
FAIRFIELD, Iowa, January 20, 2009– Managed futures gained 13.90% in 2008, according to the Barclay CTA Index compiled by BarclayHedge, the best annual performance for CTAs since their 21.02% return in 1990.
“A gain of nearly 14 percent clearly sets managed futures apart from the losses suffered by most hedge fund strategies and financial markets in 2008,” says Sol Waksman, founder and president of BarclayHedge.
“The Barclay CTA Index ended the year with a sprint, gaining 6.52 percent in the last three months of 2008.”
The Barclay Diversified Traders Index put in a strong showing in 2008, gaining 26.50%. Systematic Traders were up 18.11%, Discretionary Traders gained 12.55%, and the Financial/Metals Traders Index rose 10.48%.
“The large majority of CTAs utilize trend-following strategies,” says Waksman. “These strategies do not attempt to predict future prices, but rather identify trends. If prices are going up, then trend-followers are long. When prices are going down, they’re short.”
“Strong trends in all major market sectors offered CTAs some excellent trading opportunities in 2008. Commodity prices rallied in the first half of the year and sank in the second half. Equity prices lost ground throughout the year, and bond prices rose.”
In December, the Barclay CTA Index rose 1.02%. The Systematic Traders Index was up 1.43%, Diversified Traders gained 1.28%, and the Financial/Metals Index rose 0.96%.
The Barclay BTOP50 Index, which monitors performance of the largest traders, gained 1.02% in December and realized a 12.87% return for the year.
Click here to view 28 years of Barclay CTA Index data.
Sol Waksman is an experienced media source, providing perspectives on hedge fund and managed futures trends. For quotes, commentary or background, call 641-472-3456 or email swaksman@barclayhedge.com.
BarclayHedge (formerly The Barclay Group) was founded in 1985 and actively tracks more than 6,600 hedge funds, funds of hedge funds, and managed futures programs. Barclay has created and regularly updates 18 proprietary hedge fund indexes and eight managed futures indexes.
Institutional investors, brokerage firms and private banks worldwide utilize BarclayHedge data as performance benchmarks for the hedge fund and managed futures industries.
Labels: BarclayHedge press release, managed futures
Monday, January 12, 2009
Have Hedge Fund Investors Become More Sensitive to Management Fees?
With trading losses and redemptions shriveling the assets managed by hedge funds, we decided to take a closer look at hedge fund fees. Is the current crisis helping lower-fee funds? How sensitive are hedge fund returns to management fees?
Funds with fees between 1% and 2% gain market share at the expense of very low fee funds over the past eight years. There is no evidence of a shrinkage of higher fee funds.
Two trends emerged over the past eight years . .
Labels: CTA, Hedge Fund Flow Topical Study, hedge fund research, hedge funds
Friday, January 9, 2009
Recovering Delisting Returns of Hedge Fund
Their paper examines the issue of hedge fund performance estimation when a fund has stopped reporting returns to a commercial database and whether or not a return should be attributed to funds for the period they stop reporting.
Download the full article here
From the January 2009 issue of Barclay's Insider Report. Accredited investors can subscribe to the full newsletter for free.
Labels: Barclay Insider Report, Barclay Insider Report Guest Article, currency funds, funds of hedge funds, hedge fund performance, hedge fund research, hedge fund risk, hedge funds
November Commodity Trading Advisor and Hedge Fund Performance
Hedge funds had another down month in November reflected by losses in sixteen of our eighteen indices. The average return for the 2,494 hedge funds (ex. FoFs) that have so far reported an November return is -2.69%. The estimates for December, along with the number of funds reporting for each of our 18 sectors can be found at the link below. These indices are being continually updated as current returns for the underlying hedge funds are recorded into our system. As of this writing, 16 of 18 hedge fund sectors are showing positive returns for December.
Hedge Fund Indices Managed Futures Indices
From the January 2009 issue of Barclay's Insider Report. Accredited investors can subscribe to the full newsletter for free.
Labels: Barclay Insider Report, commodity trading advisor, hedge fund performance
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