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July 31, 2005
Hedge Funds may not perform as well in 2005
Contrary to what the industry analysts feel, the hedge fund industry may not equal the gains of previous years or even of 2004. The first half performance was much below expectations. Average hedge funds have posted returns of 1 to 2 percent in the first half. Compare this with 2.5 to 3.5% gains made by most hedge funds in the same period in 2004. Particularly the period between March and May in 2005 has been exceptionally bad. 2004 had ended with average hedge funds returns of 7 to 9 percentage points. However considering the performance of 2005 till now, the investors can expect a shortfall of 1 to 2 percent from the returns of last year. This is despite the projections that the industry is quite stable now and will definitely grow from here. The market overall has also been relatively stable therefore the industry will be able to makeup some losses made in the first half. Hedgeco.net reports:
“Jaakko Karki, chief investment officer at UK-based Attica Alternative Investments said, "March to May this year was a difficult period for hedge funds resulting in a negative return of 1 percent on average over the period. "
Read More: Hedge Fund returns in 2005 may fall short of expectations – Analysts
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