Hedge funds produced a positive return of +0.17% in August, bringing the 2004 year to date return to +1.16% for the Hennessee Hedge Fund Index. The broad market indices were mixed for the month, as the S&P 500 DRI Index climbed +0.40% (+0.43% YTD), the Dow Jones Industrial Average increased +0.34% (-2.68% YTD) and the NASDAQ Composite Index fell -2.61% (-8.22% YTD).
“Hedge fund managers we talked to stated a reluctance to make too large a play on market direction as entire sectors experienced wide swings on stock specific news,” stated Charles Gradante, managing principal of Hennessee Group LLC. “It is one of the toughest markets to play with any conviction and this lack of conviction breeds weakness. Warnings from Homeland Security Secretary Tom Ridge of a “large scale” terrorist attack to disrupt the elections have further weakened conviction in the market.”