Telegraph.co.uk- Hedge funds suffered their worst month of redemptions in seven years in July after some $55bn (\u00c3\u201a\u00c2\u00a327.4bn) was withdrawn by jittery investors concerned by lowered returns amid the global credit crunch.<\/p>\n
The sector, until recently seen as one of the most invincible within the financial community, took a heavy battering as investors redeemed funds when the markets began to fall.<\/p>\n
In total, withdrawals for all hedge funds totalled $55bn in July, based on data from the TrimTabs and BarclayHedge reports, with inflows in the same month of $23bn.<\/p>\n
But the amounts withdrawn are likely to pale in comparison when figures for August redemptions are released early next month.<\/p>\n
The TrimTabs report warned that the August position could be even greater, given the heavy losses suffered by many funds at the height of last month’s market collapse.<\/p>\n
Hedge funds, which tend to be more focused and often invest via a specific, computer-linked strategy, bore the brunt of the losses during the summer’s equity rout.<\/p>\n
Initial falls began in hedge funds which had invested in sub-prime mortgages and distressed debt, but soon widened to encompass more general computer-based quantitative funds.<\/p>\n
But Charles Biderman, of TrimTabs, believes the fall in investment in July could actually have been to blame for the significant stock market falls that were the hallmark of August.<\/p>\n