Brevan Howard continues to make money when most others don’t.
Last week the behemoth BH Global fund climbed about three quarters of a percentage point. This put the London-based fund’s dollar shares up 12.91 percent for the year and the euro shares up 13.66 percent.
To put last week’s accomplishment into perspective, during the same period the Dow Jones Industrial Average fell 6.4 percent, the Standard & Poor’s 500 Index 500 6.6 percent, the Nasdaq Composite 5.3 percent, and the Russell 2000 more than 9 percent. Commodities such as copper fell 17 percent, while silver dropped 26 percent.
Brevan Howard won’t comment. However, we did point out last month the hedge fund was said to be positioned for a global slowdown. As the markets started to discount that possibility over the summer their “risk off” positioning has worked out. It is also said to be tactically trading all year rather than taking advantage of any big themes.
In fact, the fund is up about 9 percent this quarter even though the stock market has been down every month since May. “We love funds that make money when everyone is losing money,” the head of a large state pension fund stresses, commenting about Brevan Howard.
Interestingly, in the week ended September 16, when the global stock markets surged on hopes the European debt crisis was about to be resolved, Brevan Howard was down about 2.3 percent.
It was recently reported that Brevan Howard plans to return $2 billion to investors. The fund currently manages a whopping $26.9 billion.
Brevan Howard has now become one of those few funds that made money in the financial meltdown of 2008, when it was up about 20.43 percent, and so far in 2011.
According to investors, its goal is to make 10 percent to 15 percent per year. Last year it was only up 1 percent after climbing 18.65 percent in 2009.
Since its inception in April 2003, the fund has never suffered a down year. Its worst monthly loss ever was when it was down 2.92 percent in August of 2003. That year it finished up 4.62 percent after just nine months of operation.
