The vast majority of hedge fund strategies fell into the red in August, continuing a torrid year for the $2 trillion sector although a few investment styles made gains by betting on developments such as falls in the value of the stock market, new data shows.

Funds made an average loss of 1.37 per cent in August from the previous month, meaning that they have lost on average 4.83 per cent since the start of 2008, according to Chicago-based Hedge Fund Research. The biggest loser so far this year is the Equity Hedge Index, down by 8.38 per cent. Other notable losers for the year so far include the fixed income convertible arbitrage category, down by 8.22 per cent, and the energy/basic materials index, down by 6.36 per cent.

The data shows that hedge funds playing in the energy and commodity market sectors, for example, have been hit by some sharp pullbacks in commodities such as oil in recent weeks.

Meanwhile, the greatest gainer in August of any hedge fund strategy was the technology/healthcare category, up by 2.46 per cent. Since the start of the year, the strongest category was the short-biased hedge fund index, up by 9.76 per cent. Being short of the market has proven so far to be a winning strategy.

In a separate study, figures from US-based hedge fund advisors Hennessee Group show that its main index fell 0.72 per cent in August (down 4.09 per cent YTD), while the S&P 500 rose 1.22 per cent (down 12.63 per cent YTD), the Dow Jones Industrial Average  went up 1.45 per cent (off 12.98 per cent YTD), and the NASDAQ Composite Index advanced 1.80 per cent (down 10.74 per cent YTD).  Bonds have done well, as the Lehman Aggregate Bond index advanced 0.95 per cent (up 2.01 YTD).

Charles Gradante, co-founder of Hennessee Group, said:  “This is the worst start to a year for hedge funds since the beginning of the Hennessee Hedge Fund Index in 1987.”