WEST PALM BEACH, FL (www.hedgeco.net) – New research conducted by Merrill Lynch shows that hedge fund managers trading equities concentrated their trading activities on blue-chip and growth stocksduring the month of February 2005. Merrill also showed that hedge funds now favor more long portfolios than their traditional short-selling strategy.
According to the details of the research, Merrill evaluated daily returns of equity neutral funds over the past sixteen months; equity neutral funds are unique in the sense that such portfolios are always shifting exposures to reflect new market realities.
The findings show that during the month to Feb. 8, �daily returns averaged -3.1 percent when growth stocks outperformed the market, compared with -4.4 percent over the last 12 months. On trading days when value stocks outperformed others, annualized daily returns were -6.7 percent, compared with 3.7 percent for the one-year period.
However, on the days when blue-chip stocks did better than the broader market, the daily annualized returns were 6.8 percent in the last month compared with -1.1 percent in the 12-month period.
Merrill research also showed a tilt towards large caps, however the study authors noted, ” We would caution against making definitive conclusions from a single reading.”
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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