WEST PALM BEACH, FL (HEDGECO.NET) – Hedge funds continue to face difficult times resulting from trend-less global equity markets. New hedge fund launches have dropped significantly from levels seenin the past. In fact, some of the largest hedge fund managers are experiencing losses in some of their portfolios, leading some market watchers to ask hard questions about the direction of the hedgefund market.
Most hedge fund tracking indexes are also posting losses for July as well. Standard and Poor�s reported that July hedge fund performance, as measured by the their Hedge Fund Index fell 0.54%, and two of the three sub-indices ended the month in negative territory. According to Justin Dew, Senior Hedge Fund Specialist at Standard and Poor’s. “Merger Arbitrage had a difficult month as a general widening of spreads negated the effects of a few large deals closing early.”
According to published reports, new hedge fund launches have dropped to about half of the levels seen in 2003. Hedge funds continued with their losing streak into July, according to new data by Van Global Hedge Fund Advisors, the average hedge fund tracked by the index lost 0.9% during the month of July.
Market analysts blame these poor results on the faltering stock markets, in addition to the lack of movement in the current market. This data was measured at its five-year low, further exacerbating difficulties for hedge fund managers, many of whom depend on volatility swings as part of their trading strategy.
Technology stocks lost about 8% in July, as well as small cap issues. Hedge funds however lost a fraction of that. George Van, Chairman and founder of Van Hedge Fund Advisors International explained that, �the specter of a possible slowdown in economic growth, combined with continuing concerns about high oil prices and terrorism, helped to depress market action, in addition to other factors.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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