Green Hedge Funds

The tightening of credit in general
The world economy is undergoing serious debt reduction and systemic risk and market environment which has emerged relatively new industry of hedge funds has no historical reference. "The hedge fund industry is new in the 1930s or 1970s, so it is very difficult to say how hedge funds should do in this environment," said Steve Gross, director at Penso Capital Markets .

Although this clearly marks the toughest time for hedge funds, the Dow posted -14.22% YTD, YTD -12.30% NASDAQ and the S & P 500 -13.71% YTD. In comparison, the Eurekahedge index strategy hedge funds shows many strategies waiting to -3% to -4% YTD with the macro and CTA strategies to 0.64% and 9.56% YTD respectively. "The performance of hedge funds shows the strength of the industry when all the aggregates market is down 10-15%. In addition, if you go down into single stocks, you will find a depth much greater decline in the shares of developed and emerging markets, "said Kevin Heller, CEO of $ 1.1bln Focus Asset Management.

Volatility: Friend or Foe?
"Volatility creates trading opportunities highly, yet opportunities and risks go together," said Ari Bergmann, principal in Penso Capital this past February, which launched its strategy of global crisis to take advantage of market volatility.

Fund managers often speak of requiring market volatility to achieve targeted results, however, short-term peaks and dislocations often require a return to balanced market position before profits can be realized. "A sharp increase in volatility is like a shower of rain in August, it brings green grass for us on the road, so that volatility stabilizes or declines," said Scott Sykora, president of $ 410m asset manager Partners LJM.

Short term spikes and dislocations which caused problems for both strategies in July did not have the same negative effect in all areas, as evidenced by EurekaHedge Fixed Income Funds Index Fund to 0.28%. Fixed income has taken some hits over the last twelve months and for companies such as Reade Street Capital, which manages the DMS Fixed Income Micro RV Fund and returned 1.11% in July (18.64% YTD) the market volatility is a condition welcome. "Given that the products have joined the credit crunch, it is obvious that the best asset class is one that takes full advantage of the volatility itself," said David Reade Street Main Sukoff. "There no indication that this trend will ......................

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