Financial Times – The Dow Jones Industrial Average was hovering above 12,000 again on Thursday, while debate continued to rage over whether the ageing index had any remaining relevance for today\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s markets.<\/p>\n
But the Dow\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s rapid ascent is a symptom of a strong rally, which has seen most developed markets rally by more than 10 per cent in the last three months. It also marks a sharp contrast with some other indices that tend to generate controversy, covering the hedge fund sector.<\/p>\n
Hedge fund indices notoriously tell different stories from each other. But the latest batch of information, up to the end of the third quarter, suggest that we can make two assertions. First, they are attracting very large amounts of investors\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2 money once more. Second, they are not, in the aggregate, performing any better than conventional money managers who restrict themselves to staying \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201clong-only\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d in stocks, and do not dabble with derivatives or selling short – betting that prices will fall .<\/p>\n
According to Credit Suisse Tremont, hedge funds have gained 7.64 per cent for the year to date. The only strategies with double-figure returns have been emerging markets (where returns were 10.4 per cent – not stellar when the MSCI emerging markets index is up 14.1 per cent), and convertible arbitrage, a strategy that had almost collapsed the year before.<\/p>\n