S&P Hedge Fund Index Records Positive Return In November
Standard & Poor’s reported on Tuesday that November hedge fund performance,
as measured by the S&P Hedge Fund Index, was up 1.45% for the month led by
strong returns from both directional/tactical and event-driven managers.
According to S&P, these gains in the directional/tactical index were largely
driven by strong returns in the Managed Futures sector, which came in addition
to gains from short US dollar positions and long equity positions. Moreover, in spite of lingering low levels of volatility, Long/Short Equity experienced
gains as the U.S. stock market, as measured by the S&P 500, rose by 3.86%. “Volatility again entered the energy markets in November as most futures
contracts had significant retracements off their highs due to reports of increased
oil production,” observed Justin Dew, senior hedge fund specialist at
Standard & Poor’s. “This occurrence was exacerbated by the psychological impact caused by
a large Chinese speculator reporting losses topping USD $550 million in short
volatility trades in these markets,” he added. The Event-Driven sector performed well in November, returning 1.43% for the
month, with distressed investing leading the way as positions in a few, key
energy related companies profited on their emergence from bankruptcy earlier
in the month. “Resolution over who would be the next U.S. President, and what he would
mean to the business sector, finally came to pass causing many positions in
the Special Situations sector to gain,” noted Dew. The S&P Arbitrage Index was largely unchanged in November (down 0.32%)
as Fixed Income Arbitrage had a flat month with Fed rate increases finally working
their way into bond yields. A comprehensive report in our Intelligence Report series describing Offshore Investment Funds, Stock Exchanges and Trusts, with an Analysis of the US QI Regime is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report9.asp
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