USA Today – In the spirit of glasnost, here’s an illuminating fact about the secretive hedge fund world that investors pining to get into these mysterious investments should know: Many hedge fundsare losing money this year.
Roughly 20% of the nearly 650 hedge funds that provide a Switzerland-based bank with performance data have posted negative returns this year.
The biggest loser: Tontine Overseas A. It has lost nearly 32% investing in small and midsize U.S. stocks, the bank’s Sept. 6 report shows. Six funds lost more than 20%. Hedge funds that specialize in Japanese stocks have been hurt most  31 of the 40 funds are in the red, including a 30% drop in the Whitney Japan Select Fund.
(The data cited are compiled weekly by a Swiss bank for its clients and was obtained by USA TODAY from a source unaffiliated with the bank because hedge funds won’t provide return data to the media. USA TODAY confirmed the accuracy of the data with the bank, which requested anonymity because of concerns about regulations barring hedge funds from marketing themselves to unqualified investors.)
The poor performance raises a red flag because the hedge fund industry prides itself on its ability to deliver positive returns in both up and down markets. Not even hedge funds were able to dodge the fallout caused by this spring’s global sell-off.
