8 Aug 2011
Hennessee Group LLC announced today that the Hennessee Hedge Fund Index declined -0.22% in July (+1.42% YTD), while the S&P 500 declined -2.15% (+2.75% YTD), the Dow Jones Industrial Average fell -2.18% (+4.89% YTD), and the NASDAQ Composite Index decreased -0.62% (+3.90% YTD). Bonds rallied amid the volatility, as the Barclays Aggregate Bond Index advanced +1.59% (+4.37% YTD) and the Barclays High Yield Credit Bond Index advanced +1.16% (+6.20% YTD).
“With defensive positioning and low exposures, hedge funds were able to protect capital as the equity markets sold off in July amid concerns about economic growth and the political standoff around the U.S. debt ceiling,” commented Charles Gradante, Co-Founder of Hennessee Group. “In July, there was better dispersion and lower correlations among securities as companies started to report Q2 earnings, which allowed managers to generate alpha on long and short portfolios. However, we have seen a spike in correlation and massive de-risking in early August, which will likely prove challenging for hedge funds in the short term.”
“With defensive positioning and low exposures, hedge funds were able to protect capital as the equity markets sold off in July amid concerns about economic growth and the political standoff around the U.S. debt ceiling,” commented Charles Gradante, Co-Founder of Hennessee Group. “In July, there was better dispersion and lower correlations among securities as companies started to report Q2 earnings, which allowed managers to generate alpha on long and short portfolios. However, we have seen a spike in correlation and massive de-risking in early August, which will likely prove challenging for hedge funds in the short term.”
