Hedge Funds Drop Most in History
Posted on Wednesday, November 12th, 2008 | In Hedge FundsHedge funds, as represented by Barclay’s Hedge Fund Index, dropped by their most in the 11 years since the index was created in September and October. The hedge fund universe lost an estimated 6.95% in September only to be followed by an almost 8% drop in October. These are the two worst months in the index’s history. The total drop in September and October of almost 15% dwarfs the worst previous two month period. In June and July of 2002 the Barclay Hedge Fund Index lost a combined 3.73%
Though many hedge funds claim to be market neutral, 2008 has exposed the high level of correlation between hedge funds and the broader markets. With the S&P down 8% so far this month, November may mark the seventh consecutive decline for this broad hedge fund index.
Dave Tarcap previously worked for Merrill Lynch as a Financial Analyst and as a research manager for a boutique financial consulting firm specializing in hedge fund trends.
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