08/02/2004
Hedge funds as a group performed better than equities in the first four months of 2004, according to Standard & Poor’s, a credit rating agency that also compiles hedge fund statistics, but they performed poorly in April itself. S&P’s Hedge Fund Index, which tracks a composite of hedge funds with different investing styles, reported a 1.28 percent overall return in the first four months of the year, while the S&P 500 Equity Index fell 0.42 percent.
The economic slowdown in China, fears about rising interest rates,
declines in emerging markets, currency and commodity volatility and the meltdown
in the high yield bond market hurt hedge fund portfolios in April. S&P’s
index fell 0.6 percent, while another index, compiled by Credit Suisse First
Boston and Tremont Capital Management, fell 0.58 percent.
Tremont officials
said dedicated short-bias managers (those who bet on stocks declining) did best
in April. Japanese funds that shorted Chinese equities also did well in April,
as many Chinese stocks declined in price.