Hedge funds lost 3.60% in January according to the Barclay Hedge Fund Index compiled by Barclay Hedge.
“January’s hedge fund losses were driven by the poor returns in global equity markets. Fears of a possible recession in the United States and concerns that the US consumer will reduce spending have begun impacting global markets,” says Sol Waksman, founder and president of Barclay Hedge.
All but two Barclay’s 18 hedge fund indexes lost ground in January. The Emerging Markets Index crashed 8.81%, Equity Long Bias fell 4.76%, Convertible Arbitrage dropped 3.76%, Technology lost 3.60%, and the Pacific Rim Equities Index was down 3.58%.
“Emerging markets had a spectacular run in 2007, gaining 23.57% for the year. Unfortunately, they gave back more than a third of that gain in the first month of 2008,” says Waksman.
The only hedge fund sectors in positive territory for January were Equity Short Bias, which jumped 6.97%, and the Global Macro Index, which was up 1.28%.
“Obviously the short sellers benefited nicely from taking the other side of the losses suffered by hedge funds that maintain a long bias,” adds Waksman.