Hedge funds have not escaped the recent turmoil in the financial market, with more than 70 per cent of hedge funds losing money in May, acco...

Hedge funds have not escaped the recent turmoil in the financial market, with more than 70 per cent of hedge funds losing money in May, according to the Barclay Group. The Barclay Hedge Fund Index lost 1.78 per cent in May as 11 of its 18 hedge fund indexes were down. The Emerging Markets Index dropped 4.73 per cent, Technology fell 3.44 per cent, European Equities lost 3.37 per cent, and the Pacific Rim Index was down 3.24 per cent. Unsurprisingly, hedge funds employing short strategies increased 4.97 per cent in the month. Barclay’s figures are backed up by those from Greenwich-Van Advisors whose Global Hedge Fund Index fell 0.51 per cent in May. However, Greenwich-Van points out that hedge funds still significantly outperformed most traditional benchmarks. Around 80 per cent of reporting hedge fund managers beat the S&P 500 which fell 2.88 per cent in May. The Dow Jones Industrial Average fell by 1.75 per cent, and the NASDAQ Composite Index, dropped by more than 6 per cent. The Hennessee Hedge Fund Index too fell by 1.15 per cent last month. Its Long/Short Equity Index decreased 1.52 per cent in May, while its Global/Macro Index decreased 2.93 per cent. Convertible arbitrage managers posted another positive month according to Hennessee, with returns up 0.69 per cent.