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March 19, 2009

Looking Deeper: Hedge Funds Decouple as Equity Markets Continue to Decline

New York, March 19, 2008 The Credit Suisse/Tremont Broad Hedge Fund Index finished down 0.88% in February, and has outperformed the MSCI World Index by 18.2% year-to-date, as hedge funds continue to decouple from equity markets. A Credit Suisse/Tremont Hedge Fund Index monthly commentary provides insight.

 

A monthly publication from Credit Suisse/Tremont offers a 360 degree review of the events that shaped hedge fund performance over the previous month. The report includes:

 

n         A summary of global markets and an overview of hedge fund performance for February

n         In-depth commentary on individual hedge fund sectors

n         Hedge fund return dispersion statistics for each strategy

 

Research indicates that during equity bull markets, hedge funds tend to exhibit higher correlations with broad equity markets, enabling managers to capture a large percentage of the desirable upside. Since January, the correlation between hedge funds and equity markets has decreased significantly, an indication that hedge funds may be positioning themselves for the current market and, in turn, may begin producing positive returns.

 

As hedge funds continue to decouple, many of the best performing funds have been able to take advantage of opportunities by maintaining defensive positions, being able to tactically maneuver and having “dry powder” on hand.

 

Dedicated Short Bias managers continued to perform positively last month, posting a return of 3%. The strategy is now up over 7% for the year as managers continue to benefit from falling equity prices. Convertible Arbitrage, Fixed Income and Global Macro strategies also ended the month in positive territory. The Global Macro strategy has had four straight months of positive performance, and has on several occasions outperformed the Broad Index during periods of dislocation since inception of the Index in 1994. The strategy is currently up almost 3% for the year.

 

Credit Suisse Tremont Index LLC industry commentaries and publications are available on the Research section of our website, www.hedgeindex.com. Click here to view the full report.

 

Information

Meg Bode, Bode Associates, telephone 516 869 6610, meg@bodeassociates.com

Suzanne Fleming, Corporate Communications, Credit Suisse, telephone 212 325 7396, suzanne.fleming@credit-suisse.com

 

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Certain information contained in this document constitutes “Forward-Looking Statements” (including observations about markets and industry and regulatory trends as of the original date of this document), which can be identified by the use of forward-looking terminology such as “may”, “will”, “should”, “expect”, “anticipate”, “target”, “project”, “estimate”, “intend”, “continue” or “believe”, or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties beyond our control, actual events, results or performance may differ materially from those reflected or contemplated in such forward-looking statements. Readers are cautioned not to place undue reliance on such statements. Credit Suisse has no obligation to update any of the forward-looking statements in this document.

 

 

 

 


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