Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
Explore the most informative hedge fund articles and take the news with you, using HedgeCo RSS.
Still want more? Browse the hedge fund blogs, authored by hedge fund industry experts.
Globe and Mail - Canadian hedge funds posted a brutal 11.2 per cent decline in September, losses that are likely to leave many investors questioning this expensive alternative asset strategy.
The latest installment of the Scotia Capital Canadian Hedge Fund Performance shows these funds outperformed the S&P/TSX composite index last month – it was down 14.7 per cent. But mounting losses on funds sold to investors as market neutral, or absolute return, are going to translate into redemptions.
“September was an extremely challenging month for Canadian hedge fund managers who were largely unable to successfully navigate erratic price movements in stocks and falling energy prices,” said Scotia Capital’s note on the sector’s performance.
“Panic selloffs in an environment driven by fear and uncertainty left major equity markets significantly down at the end of September,” said the investment bank. Obviously, the market swings have become even more violent in October.
Globe and Mail - Black clouds have been building over the hedge fund industry for much of the year, and a storm could break in coming weeks as investors receive their second set of lousy monthly results from funds that are meant to do well in good markets and bad.
A series of challenges, some unrelated to the hedge funds’ investment strategies, have combined to create lower returns and investor redemptions.
Industry experts expect some funds will be forced to close down as clients walk away.
The single biggest problem is performance. The most recent update of Scotia Capital Inc.’s hedge fund index shows the average fund was down 8.6 per cent in July, compared to a 1.74-per-cent decline in the S&P/TSX equity benchmark. Since its inception in 2005, the Scotia Capital hedge fund index averaged a 13.9-per-cent annual gain.
Globe and Mail - Joe E. Lewis, the late American nightclub comic and inveterate horse player, once quipped: "I hope I break even. I need the money." That could very well become a mantra in the hedge fund world, where even the best and brightest of managers with impressive track records have been suffering through some of their worst results in years.
In the first three months of this year alone, 170 funds in the United States went out of business, and that was before things got really bad. Globally, hedge funds ended the first half with their most dismal performance in a decade. And then came the selloff in resource stocks, which brought misery to commodity funds, one of the few bright spots earlier in the year. July ended up being the worst month for futures in more than five years.
Scotia Capital’s Canadian hedge fund index, a useful measure of performance, was off 8.6 per cent on an asset-weighted basis last month, bested by both the gloom-laden TSX composite and S&P 500 indexes.
In the first three months of this year alone, 170 funds in the United States went out of business, and that was before things got really bad. Globally, hedge funds ended the first half with their most dismal performance in a decade. And then came the selloff in resource stocks, which brought misery to commodity funds, one of the few bright spots earlier in the year. July ended up being the worst month for futures in more than five years.
Scotia Capital’s Canadian hedge fund index, a useful measure of performance, was off 8.6 per cent on an asset-weighted basis last month, bested by both the gloom-laden TSX composite and S&P 500 indexes.