HEDGE FUNDS LOSE -0.50% IN AUGUST
Hedge Funds Protect Capital during Volatile Month
September 10, 2013 - New York, NY - Hennessee Group LLC announced today that the Hennessee Hedge Fund Index lost -0.50% in August (+6.45% YTD), whilethe S&P 500 lost -3.13% (+14.50% YTD), the Dow Jones Industrial Average decreased -4.45% (+13.02% YTD), and the NASDAQ Composite Index shed -1.01% (+18.89% YTD). Bonds were also negative on the month, as the Barclays Aggregate Bond Index lost -0.51% (-2.81% YTD).
"In one of the most volatile months since May of 2012, hedge funds did what they do best, capital preservation," commented Charles Gradante, Co-Founder of Hennessee Group LLC. "Several factors, such as whispers that the Fed may taper its monthly bond purchases, the continued steepening of the yield curve, and possible U.S. involvement in the Middle East, led to a rout in equities during August. Nonetheless, hedge funds trail equities as 'don't fight the Fed', rather than valuation, rules this market."
Equity long/short hedge funds were negative in August, as the Hennessee Long/Short Equity Index lost -0.55% (+10.56% YTD). The best performing sectors were materials (-0.19%), information technology (-0.84%), and energy (-2.08%). The underperforming sectors were utilities (-5.52%), financials (-5.22%) and consumer staples (-4.54%). The market experienced its second negative month of 2013, reaching an all time high on August 2nd, only to sell of drastically due to fears fueled by unrest in Syria, a potential near term target for the Federal Reserve to scale back its quantitative-easing program and a continuation of rising interest rates.