After losing a record 21.53% in 2008, hedge funds began 2009 in the red, sliding 0.26% in January according to the Barclay Hedge Fund Index compiled by BarclayHedge.
“Global equity markets lost ground in January and volatility remained high,” says Sol Waksman, founder and president of BarclayHedge. “Investors were whipsawed by the competing themes of optimism fueled by the forthcoming large stimulus package versus a continuing decline in the economy.”
Overall, 11 of Barclay’s 18 hedge fund indices were in positive territory in January. The Barclay Convertible Arbitrage Index jumped 5.59%, Equity Short Bias Index gained 3.44%, Multi-Strategy was up 2.39%, Healthcare & Biotechnology gained 1.76 %, the Event Driven Index rose 1.17%, and Technology was up 0.75%.
“In a month where the S&P 500 lost 8.43 percent, hedge funds performed admirably,” says Waksman.
On the losing side, Emerging Markets fell 2.63%, Equity Long Bias was down 1.12%, and Pacific Rim Equities lost 0.66%.
“After losing nearly 40 percent in 2008, Emerging Markets continue to face difficult economic times,” says Waksman. “Although banks in emerging markets don’t have the same high levels of exposure to toxic mortgage securities, the emerging economies are greatly impacted by declining commodity prices and reduced consumer spending in developed countries.”
The Barclay Fund of Funds Index gained 0.96% in January, after suffering seven straight months of losses to end 2008.
“It appears that, on balance, funds of funds did a good job of reallocating portfolios at year-end, and managed to put in an excellent showing in January,” says Waksman.
D.C.