Reuters.uk – Hedge funds delivered strong returns in the first quarter of this year and with market volatility expected to rise and clear trends evident in currencies and bonds the omens for 2006 aregood.
So far this year hedge funds have delivered average returns of about 4 percent compared with 7.5 percent for the whole of last year.
Taking into account the summer lull, hedge fund investors say a simple extrapolation through to the end of the year could mean average returns of between 12 and 15 percent in 2006.
“It’s been a good start … There is a very good chance that we will do better then we did last year,” said Ian Morley, chief executive at Dawnay Day Olympia.
“Hedge funds are an insurance, a way to protect capital during stock market down periods … Most people only remember that when equities crash.”
Whether hedge fund returns do exceed those of equities this year remains to be seen and few are prepared to forecast the sort of event that could trigger a major stock market correction.
