Twenty Per Cent of Hedge Funds Losing Money This Year

Stephen Harris

20 September 2006

According to a report in USA Today around 20 per cent of the nearly 650 hedge funds that provide an unnamed (for regulatory reasons) Swiss bank with performance data have posted negative returns so far this year. The largest individual loser was Tontine Overseas A, having lost nearly 32 per cent so far this year by investing in small and midsize US stocks. Six funds reporting to the Swiss bank lost more than 20 per cent, with hedge funds focusing on Japanese stocks losing the most. Thirty-one of the 40 funds monitored are losing money this year including a 30 per cent fall for the Whitney Japan Select Fund. Separately, the Credit Suisse/Tremont Hedge Fund Index returned 0.85 per cent in August. The index shows that emerging markets is the top performer year-to-date, returning 10.92 per cent. By comparison, the FTSE All World Index is up 10.48 per cent year-to-date and the S&P 500 is up 5.8 per cent year-to-date. The index also revealed that the short-biased strategy struggled during August as the sector declined by 0.72 per cent. The global macro category was the other major loser, falling 0.74 per cent in the month. The managed futures sector ended the month up 1.39 per cent according to the index.