Key Takeaways
- • The Dow Jones Credit Suisse Hedge Fund Index fell 2.30% in August, but still outperformed equity benchmarks, which fell 3.96% for the Dow Jones Industrial Average Total Return and 7.69% for the Dow Jones Global Indexes.
- • Only three of ten hedge fund strategies posted positive returns in August.
- • Dedicated Short Bias was the best-performing strategy, gaining 6.56% as managers capitalised on deteriorating equity market conditions.
- • Global Macro rose 1.91%, supported by fixed income positions across the curve amid a flight to safety in US Treasuries.
- • Event Driven strategies continued to lose money, hurt by choppy trading, large price swings and rising cross-asset correlations.
Summary
The Dow Jones Credit Suisse Hedge Fund Index posted negative performance in August, finishing down 2.30%, according to Hedgeweek. The decline was broad, with only three of the index's ten strategies recording gains for the month. Even so, the index outperformed traditional equity benchmarks by more than five percentage points. The Dow Jones Industrial Average Total Return fell 3.96% and the Dow Jones Global Indexes declined 7.69% over the same period. Hedge funds outperformed global equities by a similar margin, as reported separately in coverage of the monthly results.
Dedicated Short Bias was the strongest performer, gaining 6.56% as managers benefited from weakening equity markets. Global Macro managers also finished positive, up 1.91%, as fixed income exposure at both the long and short ends of the yield curve generated returns during a flight to safety into US Treasuries. The Event Driven sector remained negative, with managers challenged by choppy trading conditions across asset classes, large price swings and increased correlations between markets.
The August results show the index's relative resilience during an equity sell-off, driven primarily by short-biased and macro strategies. The primary source does not provide the year or additional detail on fund flows or assets under management.
Dedicated Short Bias was the strongest performer, gaining 6.56% as managers benefited from weakening equity markets. Global Macro managers also finished positive, up 1.91%, as fixed income exposure at both the long and short ends of the yield curve generated returns during a flight to safety into US Treasuries. The Event Driven sector remained negative, with managers challenged by choppy trading conditions across asset classes, large price swings and increased correlations between markets.
The August results show the index's relative resilience during an equity sell-off, driven primarily by short-biased and macro strategies. The primary source does not provide the year or additional detail on fund flows or assets under management.
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