The pounding that many equity-focused hedge funds took in August has dimmed their prospects for a positive finish unless the equities market stages renowned big year-end rally. Short of that, many hedge funds may see their second negative year in a row which will darken the clouds hanging over the industry, according to a report at Reuters.com. UK hedge funds in particular are being buffeted by all economic forces including the U.S. debt woes and the Eurozone crisis.
Hedge funds, such as UK-based Lansdowne Partners and OEI MAC added to their year-to-date losses with double-digit declines in August. By contrast, many of the global macro funds are surging due to their bearish strategies based on their dim outlook on the global economy. Hedge funds, such as MW Global Opportunities Fund shot up nearly 11 percent in August by shorting select international markets. MW Global Opportunities Fund is up 16.3% on the year. Many global macro funds favor gold and fixed income investments in the current economic climate, and funds, such as Reade Griffith’s Polygon Investment Partners, which keys in on convertibles is ahead 9% for the year. Man Group’s GLG long-short hedge fund padded its year-to-date gain with a 1 percent gain. Overall, global macro funds, which tend to favor gold and fixed income investments in the current economic climate, are just about even on the year compare with the average decline in equities-based hedge funds of 13%. |
