Looking Up In August And Looking Down

So far, hedge funds have celebrated the return of the positive returns as nearly all indices recorded growth of at least 1% in August after three down months.

September 11, 2006

So far, hedge funds have celebrated the return of the positive returns as nearly all indices recorded growth of at least 1% in August after three down months. The Greenwich-Van Global Hedge Fund Index climbed 1.30% last month, while the Hennessee Hedge Fund Index rose 1.21% and HedgeFund.net's HFN Hedge Fund Aggregate Average increased by 1.14%. That's the good news, and it should make investors happy Ð except for the sobering news that at least four benchmarks left hedge funds in the dust in August, and the fact that investors have to pay extra fees for the HF privilege. The S&P 500 was up 2.38%, but the real high fliers last month were the Nasdaq, which soared 4.41% and the Nikkei 225 at

4.42%. Even the Lehman Brothers Aggregate Bond Index outdid the hedgies with 1.53%. Charles Gradante of Hennessee Group explained in an Investment News interview that the HF laggards came "because managers lowered gross and net exposure at the end of July." Gradante adds, "Most managers

do not feel the market is fundamentally positioned to make new highs in the Dow Jones Industrial Average and Standard & Poor's 500."