Hedge funds posted a third straight month of declines in August, with a 1.87 percent loss, as fears about slower growth in China, an interest rate hike in the United States and falling oil prices sent global stock markets tumbling, new data show.
The drop left the average fund nearly flat on the year, with a 0.18 percent gain in the HFRI Fund Weighted Composite Index since January, according to numbers released on Tuesday by tracking firm Hedge Fund Research.
Only managers who bet exclusively that securities will fall, so-called short sellers, posted gains, with a 5.03 percent increase last month, leaving them up 1.13 percent for the year to date. Activist investors, who often make big long bets hoping they can unlock value by prodding corporations into buying back shares or shaking up management, lost 3.46 percent last month, for a year-to-date gain of only 0.45 percent.
But even with the August declines – and with big-name managers ranging from Ray Dalio to David Einhorn posting losses last month – the average hedge fund outperformed the stock market. The benchmark Standard & Poor's 500 index fell 6.3 percent in August, its biggest monthly loss in more than three years.
The hedge fund declines in August followed a 1.24 percent drop in June and a 0.40 percent dip in July. The 1.87 percent fall in August ranks as the biggest loss since a decline of 2.61 percent in May 2012.
Also on Tuesday, tracking company Preqin released a list of funds that posted the most consistent returns over the last five years. Altum Credit Fund, Daniel Loeb's Third Point, KG Investments Fund, BNY Mellon ARX Extra FIM, Polygon Convertible Opportunity Fund, and a handful of funds from Peregrine Capital were among the most consistent performers.
