New York (HedgeCo.Net) August was a brutal month for the global stock market as major indices, in most cases, dropped over eight percent. The S&P dropped 6.26% and that made it one of the leading indices from around the globe. Asian markets were hit the hardest with the Shanghai Composite losing 12.49% during the month and the Hang Seng Index dropped 12.04%. In Europe we saw the German DAX drop 9.28% while the Paris CAC dropped 8.45% and the EuroStoxx50 dropped 9.38%. The London FTSE declined 6.7%, but got a little help from being closed on August 31.
With that backdrop in mind, we wanted to look at how our models performed during the month of August. We looked at the 16 fund manager models and the five composite long/short models. We left out the five long-only models and the five short-only models as they are one directional models and as you can imagine the long-only models were down and the short-only models were up. The long/short models are a better representation of true hedge funds that can play either side of the market and do so at the same time.
What the results showed is that of the 21 models, 14 models performed better than the overall market. Five of the models (two composite models and three fund manager models) were able to gain ground as the overall market declined sharply. Overall, the average return for the 21 models was a loss of -3.91% which is better than what the S&P and it is much better than what most of the other global indices did during the month of August.
| Model | Return |
|---|---|
| HedgeCoVest Basic Materials Long/Short | 4.29% |
| HedgeCoVest REITS Long/Short | 4.12% |
| Cornerstone | 2.31% |
| Old West | 2.22% |
| Lake Austin | 0.96% |
| Brookdale | -0.37% |
| Innovative Long/Short | -1.53% |
| HedgeCoVest Technology Long/Short | -2.02% |
| MaxwellThacherGlobal | -2.06% |
| HedgeCoVest Energy and Utilities Long/Short | -2.38% |
| Probabilities Fund | -3.29% |
| Ashbury Heights | -3.44% |
| Pawleys Growth | -5.64% |
| Pawleys Dividend | -6.03% |
| MaxwellThacherUS | -6.81% |
| HedgeCoVest Biotech Long/Short | -7.73% |
| Pinnacle Capital | -7.73% |
| Cognios | -8.56% |
| Emancipation | -9.28% |
| CMJ Partners | -11.54% |
| Deer Creek | -17.55% |
| Average Model | -3.91% |
As we saw with the liquid alternative market as a whole, most of the HedgeCoVest models performed like we want them to do during a market pullback. As we have stated before, the idea of alternative investing is as much about protecting the downside as it is capturing gains on the upside. Liquid alts do this as does HedgeCoVest. We believe HedgeCoVest is a better solution as there is intraday liquidity, complete transparency and lower initial investment requirements than many of the liquid alt funds.
Rick Pendergraft
Research Analyst
HedgeCoVest
