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July 12, 2005
Hedge Funds out perform stocks in the first half
Analyses of the results of the first quarter suggest good news for Hedge Funds. While the stocks saw a fall (though minor), the hedge funds performed better. As per the data released on Friday, Standard & Poor's 500 stock index fell 1.70 percent while average hedge fund rose 0.13 percent. This phenomenon is a result of the funds betting on fall of stocks, increase in oil prices and minor recovery of dollar. All of which are a result of worries about rising interest rates and overall slower economic growth. In the last half a decade, the assets of hedge funds industry have doubled to $1 trillion thanks to following of trading techniques which are not generally followed by traditional funds. But Hedge Funds also have a market cycle just like the rest of the market and fall backs are inevitable. For example losses incurred by funds that specialize in convertible arbitrage strategies have heavily affected the overall performance of the fund this year.Reuters.com reports:
“Convertible arbitrage funds fared better as prices steadied after several funds went out of business and managers adjusted to redemptions. Now some funds are buying up securities for less…”
Read More: Hedge funds live up to promises in first half
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