Following news of the terrorist bombings in London , hedge fund managers jumped into the financial fray, placing bets on vulnerable sectors such as retail, travel and transportation. However, the quick recovery of the markets may have negated the efficacy of short-selling, even by the end of the day, CNN/Money reports.

Treasuries and Swiss francs were also popular among hedge funds managers, while others closed out their short positions and gravitated towards sector-specific stocks such as insurance companies. With the amount of volatility and uncertainty created by such situations, managers don't want to react too hastily and make drastic changes to their positions, said Forrest Fontana, who manages the equity hedge fund Fontana Capital.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.