According to FierceFinance it's getting to that time of the
year when it's easy to panic if you're an underperforming hedge fund.
Credit Suisse, as noted by Reuters, says there are plenty of
signs that hedge funds are ramping up risk in an effort to reverse their
lagging returns. Through the end of August, hedge funds were up about 4.5
percent, compared with a 13.5 percent total return for the S&P 500 and 8.2
percent for the MSCI World Index. Hedge funds focused on credit strategies have
been the best performers, with returns of more than 7 percent this year, thanks
perhaps in part to a surge from European sovereign debt just recently.
Most hedge funds have benchmarks other than the stock
market, you never want to admit being outperformed by broad market indexes.
There's still time to recover. Credit Suisse's prime brokerage says hedge fund
exposure to higher-risk stocks has reached levels not seen since the spring.
Holdings in such stocks rose 40 percent in August and now represent about one
third of hedge funds' net U.S. exposure….
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