Hedge Fund Data Points To Another Down Month

by Carla Johnson, Inverstors Offshore.com

11 August 2004

As the major hedge fund trackers begin to report their monthly performance figures, a negative return from the Hennessee Hedge Fund Index for July confirms that fund managers are continuing to struggle amid stuttering equity markets.

According to Hennessee, its Hedge Fund Index last month declined by 1.26%, following up a 0.51% decline in June. However, despite last month’s drawdown, the index still managed to outperform the major equity benchmarks as the S&P 500, Dow Jones Industrial Average and the NASDAQ Composite fell 3.31%, 2.83% and 7.83% respectively.

However, falling stock prices gave short-selling strategies something of an opportunity last month, and The Hennessee Short Biased Index was the top-performing index with a return of 10.17%, mainly supported by falling technology stocks.

The second best performer for the month was the Hennessee Latin America Index with a return of 3.76% as both Brazil and Argentina saw increases in their equity markets, posting 8.2% and 3.9% gains respectively.

The Hennessee Technology Index was the worst performing strategy, with a decrease of 4.93%, whilst the Healthcare and Biotech Index also suffered a setback, declining 3.81%.

“Hedge fund managers reported that it is difficult to make a good case to increase exposures to the market,” said Charles Gradante, Managing Principal of Hennessee Group, observing:

“Stock picking has not been rewarded except in one sector, energy.”

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