WEST PALM BEACH, FL (HEDGECO.NET) – Lackluster performance by hedge funds recently has led some hedge fund critics to again raise questions about claims by hedge funds that they can deliver absolutereturns to investors. Since April, hedge fund returns have declined to the point where most funds are negative on the year. Some analysts charge that in recent months hedge fund returns have moved intandem with the returns posted by the equity markets.<\/p>\n
Declining volatility in the markets has undoubtedly reduced trading opportunities that hedge funds traditionally take advantage of. According to Ross Leckie, a director at British-based fund manager Martin Currie, \u00c3\u00af\u00c2\u00bf\u00c2\u00bdThe jury is out. We\u00c3\u00af\u00c2\u00bf\u00c2\u00bdre all watching and waiting, if hedge fund returns and markets are correlated then why investors should pay such high fees…If hedge funds can\u00c3\u00af\u00c2\u00bf\u00c2\u00bdt make money in flat markets their credibility will be suspect.\u00c3\u00af\u00c2\u00bf\u00c2\u00bd<\/p>\n
According to AQR Capital Management LLC, from January 1994 to September 2000 data event-driven, long\/short equity, emerging market and global macro strategies have all had the inclination historically to deliver returns showing greater correlation with the U.S. equity indexes. Those strategies put together also account for nearly half of the total assets managed by hedge fund firms.<\/p>\n
Hedge fund analysts think that hedge funds do indeed deliver absolute returns. They cited the bear market years of 1999 to 2003, where hedge funds delivered average returns of 10%. The global equities showed significant losses during that same period.<\/p>\n
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net<\/p>\n
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