New York (HedgeCo.net) – With only one week to go in August, the S&P is down over 10% so far this month and the index is facing its worst monthly loss since February 2009. Based on information from a Wall Street Journal article, hedge funds are faring much better than the overall market during this rout.

According to the article Morgan Stanley’s prime brokerage, equity-focused hedge funds experienced average losses of 1% on both Thursday and Friday and that was the first time since August 2011 the industry as a whole saw such losses. Morgan Stanley also reported that the average hedge fund is down 1.7% so far in August and is up less than 2% on a year to date basis. Considering the 10% loss in August and a loss of over 8% YTD for the S&P, hedge funds as a whole are still looking pretty good.

At HedgeCo.net and at HedgeCoVest, we have continuously pointed out how the hedge fund industry as a whole is likely to lag the overall market during an extended bullish period, but when the market gets more volatile, enters a correction or enters a bearish phase, hedge funds tend to outpace the overall market.

Rick Pendergraft
Research Analyst
HedgeCoVest