“Although equity markets in developed nations had double-digit losses in February, hedge funds performed comparatively well,” says Sol Waksman, founder and president of BarclayHedge.
“After a very difficult year in 2008, equity-based hedge funds appear to have adapted to the current climate by delevering and improving their stock selection.”
Two hedge fund indices had big gains in February – Convertible Arbitrage and Equity Short Bias.
The Barclay Convertible Arbitrage Index added 2.99% in February. After just two months, Convertible Arbitrage is up 9.10% in 2009.
“Convertible Arbitrage was one of the poorest performing sectors in 2008, losing 27.66%,” says Waksman. “Proprietary trading desks sold off their convertible bonds last year in order to raise cash. Now prices are cheap and the strategy has been profitable.”
The Barclay Equity Short Bias Index jumped 4.14% in February, and is up 7.38% year-to-date.
“Many equity markets have extended their 2008 sell off into the new year, providing ample opportunities for those trading the short side of the market,” says Waksman.
Overall, 13 of Barclay’s 18 hedge fund indices lost ground in February. The Barclay Equity Long Bias Index lost 3.41%, Distressed Securities fell 2.77%, Healthcare & Biotechnology was down 2.66%, and Global Macro lost 1.98%.
The Barclay Fund of Funds Index lost 0.17% in February, but is still up 0.54% in 2009.
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Sol Waksman is an experienced media source, providing perspectives on hedge fund and managed futures trends. For quotes, commentary or background, call 641-472-3456 or email swaksman@barclayhedge.com.
BarclayHedge (formerly The Barclay Group) was founded in 1985 and actively tracks more than 6,000 hedge funds, funds of hedge funds, and managed futures programs. Barclay has created and regularly updates 18 proprietary hedge fund indexes and eight managed futures indexes.
Institutional investors, brokerage firms and private banks worldwide utilize BarclayHedge data as performance benchmarks for the hedge fund and managed futures industries.