Hedge funds are struggling with the worst year since the financial crisis. With a loss of just three percent, their performance is still better than the one of the global share markets.
After share price losses of healthcare and biotechnology shares, the performance of hedge funds was reduced significantly. Six of the stocks that were most popular with the hedge funds fell more than 20 percent last month, according to a report by Novus Partners Inc. “Hedge funds are reeling from a relentless rout that has all but killed a year’s worth of alpha in a matter of two weeks,” Stan Altshuller, chief research officer at Novus, wrote in a report discussing popular trades among some of the largest funds, according to Bloomberg.
Some are comparing the losses to the year 2008, the height of the financial crisis. In that year, hedge funds have lost 19 percent on average. The losses of hedge funds from the beginning of this year until the end of September amount to about three percent only, says Hedge Fund Research. Thus, hedge funds have performed much better than the global share markets did. Since 2008, hedge funds have lost investor’s money only once during 2011.