Credit Suisse/Tremont Hedge Fund Index Gains In August

by Carla Johnson, Investors Offshore.com

19 September 2006

The Credit Suisse/Tremont Hedge Fund Index extended July's modest gain by returning 0.85% in August, according to Oliver Schupp, President of the Credit Suisse/Tremont Hedge Fund Index.

"With the economy slowing, the Federal Reserve on August 8th halted its campaign to increase interest rates after more than two-years of hikes,” Schupp observed.

He continued: “The pause gives policymakers the opportunity to assess the market's reaction to their previous rates hikes. The markets reacted positively to the pause and Long/Short Equity Managers benefited with an increase of 1.54% for the month of August. The Event Driven Sector profited from an environment of high degrees of liquidity, tightening European credit spreads and widening US credit spreads, which induced positive returns of 1.05%.”

Robert I. Schulman, Chief Executive Officer of Tremont Group Holdings, added: “After May and June's sell-off, the Emerging Markets sector acted resilient, ending the month up 1.42%."

"The strong directional trend of the commodities market enabled the trend following Managed Futures Sector to gain positive traction ending the month up 1.39%," he noted.

The index shows that Emerging Markets is the top performer year-to-date, returning 10.92%. By comparison, the FTSE All World Index is 10.48% up year-to-date, while the S&P 500 is up 5.8% YTD.

The index also revealed that managers employing a short-biased strategy struggled during August as the sector declined by 0.72%. The Global Macro category was the other major loser, falling 0.74%.

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