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Stock Market Lifts Hedge Fund Returns; Barclay Hedge Fund Index Up 2.06% in August

FAIRFIELD, Iowa, September 15, 2009– Hedge funds rose 2.06% in August according to the Barclay Hedge Fund Index compiled by BarclayHedge.

“After recording six straight months of positive returns, the Barclay Hedge Fund Index has now gained 16.48 percent in 2009, versus a gain of 14.97% for the S&P 500 Total Return Index,” says Sol Waksman, founder and president of BarclayHedge.

Overall, 16 of Barclay’s 18 hedge fund indices were profitable in August. The Barclay European Equities Index gained 4.50%, Convertible Arbitrage was up 3.73%, Distressed Securities added 3.08%, and Equity Long Bias gained 3.04%.

“Strong performance in three sectors – European Equities, Emerging Markets and Pacific Rim Equities – indicates the global nature of recent stock market gains,” says Waksman.

“The rally in fixed income was uninterrupted in September and credit spreads continued to narrow; both positive trends for many hedge fund strategies.”

Year-to-date, 12 of Barclay’s 18 hedge fund indices have achieved double-digit returns. The Convertible Arbitrage Index has returned 40.70%, Emerging Markets is up 30.39%, Equity Long Bias has gained 21.14%, Healthcare & Biotechnology is up 20.26%, the Event Driven Index has gained 20.10%, and Pacific Rim Equities are up 15.20.

Other indices gaining 10% or more include Multi Strategy, Distressed Securities, European Equities, Technology, and Equity Long/Short.

The Equity Short Bias Index lost 1.75% in August. Short Bias is now down 12.04% in 2009.

“A 40.53% increase in the S&P 500 over the past six months has created problems for managers trading the short side of the market,” says Waksman.

“Although the Barclay Equity Short Bias Index was up a record 40.91 percent in 2008, the recent uptrend in stocks has significantly reduced total returns for short-sellers for the period beginning January 1, 2008.”

The Barclay Fund of Funds Index gained 1.09% in August, and is up 6.89% year to date.

Click here to view five years of Barclay Hedge Fund Index data, or download 11 years of monthly data.

Sol Waksman is an experienced media source, providing perspectives on hedge fund and managed futures trends. For more commentary or background, call 641-472-3456 or email swaksman@barclayhedge.com.

BarclayHedge (formerly The Barclay Group) was founded in 1985 and actively tracks more than 6,000 hedge funds, funds of hedge funds, and managed futures programs. Barclay has created and regularly updates 18 proprietary hedge fund indexes and eight managed futures indexes.

Institutional investors, brokerage firms and private banks worldwide utilize BarclayHedge data as performance benchmarks for the hedge fund and managed futures industries.