According to Hennessee Group LLC, September proved to be a strong month for hedge funds. The funds' performance rose by 1.7%, a higher growth than equity and bond markets, The Wall Street Journal reports. During the month, the Standard & Poor's 500 stock index rose 0.69% and the Dow Jones Industrial Average 0.83%.
Market declines occurred in NASDAQ Composite (0.02%) and in bond markets (0.85%), as tracked by the Lehman Brothers Intermediate Government Corporate Bond Index.
Through analyzing 900 funds, Hennessee found that 21 out of 23 hedge fund strategies, reported positive returns. The two indexes that marked a loss were telecommunications and media (0.08%) and merger-arbitrage (0.06%.)
"Hedge funds continue to perform above market averages on both the long and short side of the portfolio," said Hennessee Managing Principle E. Lee Hennessee. The Hennessee Long/Short Equity Index rose by 1.36%. The firm also reported that managers are drifting to larger-cap companies, believing they will find more attractive risk/reward profiles and better international opportunities there.
Distressed funds also marked a rise, with the Hennessee Distressed Index gaining 1.44 % in September, up from 0.93% in August. The growth can be attributed to Delta Airlines and Northwest Airlines' bankruptcy filings.
Meanwhile, macro managers were helped during the month by an increase in gold prices, oil reaching $69 a barrel and the dollar's increased value against the Euro. The Global/Macro Index returned 3.42%, up significantly from 1.24% in August, Hennessee said.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.