Merger Arbitrage Lone Gainer For Hedging Indexes
Source: http://www.indexuniverse.com/sections/newsinfocus/5057-merger-arbitrage-lone-gainer-for-hedge-fund-indexes-in-november.html?Itemid=3&utm_source=straightstocks.com&utm_medium=sidebar&utm_campaign=rssPosted on Friday, December 12th, 2008 | In Exchange Traded Funds
The lone bright spot among the DJ hedge fund indexes was
merger arbitrage.
Only one of four strategies in the
Dow Jones Hedge Fund Strategy Benchmarks posted positive performance in November.
Many hedge fund indexes were down more than the major equity benchmark the Dow
Jones Wilshire 5000 was in November, (-8%) and significantly trailed the Dow
Jones Corporate Bond Index, which was up 4.88%.
The lone bright spot among the Dow
Jones hedge fund indexes, albeit a tiny bright spot at 0.15% for the month, was
merger arbitrage. For the year-to-date period through
November, merger arbitrage was still down about -8.72%.
Merger arbitrage was also one of
six hedge fund index categories among the much larger family of Hennessee Group
hedge fund indexes that posted positive returns in November, also barely up at
0.26%.
Among the 27 Hennessee hedge fund
indexes, the Macro Index and the Market Neutral Index had monthly returns of 1.23%
and 1.15% in November, respectively. Its Short-Biased Index continued to lead
all hedge fund benchmarks, up 4.13% for the month.
Since the summer months, hedge
funds have been hit hard by the market meltdown, mass investor redemptions and
decreasing leverage available in the market.
Looking for other bright spots
among the hedge fund carnage, Dow Jones noted that its convertible arbitrage
benchmark was only down -4.80% in
November, making it the second best performer among the four major hedge fund
benchmarks. And that was a notable change, as year-to-date, convertible arbitrage
has been the worst performer, down 47.70% through November.
The Dow Jones event-driven and distressed
securities hedge fund indexes were
down 6.35% and 7.47%, respectively, for the month. For the year-to-date through
November, event driven is down 23.83% and distressed is down 32.57%.
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