Australia's Absolute Return & Hedge Funds continued to weather the storm in financial markets and outperform the broader equity benchmarks to the end of September, in spite of losing -8.68% on a year to date (YTD) basis. The ASX200 was down nearly 25% during this period, while the average September hedge fund return in AFM's database of over 200 funds was down -4.78% vs. the ASX200’s loss of 9.85%.
This year Hedge Funds have had to navigate the credit crisis and volatile markets, massive deleveraging and more recently the sharp selloff in commodity prices all of which have combined to see some funds to report significant negative returns. However, against that 24% of local funds have achieved a positive return year to date, and 19% were positive in September. 87% of funds in our database have outperformed the ASX200.
In addition Australian managers have also had to handle political and regulatory volatility, as the local regulator, ASIC, went well beyond their offshore counterparts by banning all short selling, and then reversing that decision with a series of amendments. Policy on the run has not made life easier for managers, or returns better for investors. Some semblance of clarity has returned with a new set of guidelines (mainly enforcing transparency of short positions) due to come into effect on 19th November, although short sales in Australia’s financial sector remain restricted until late January.
To read the full report download the file below.
Attached Files:
Absolute Return & Hedge Fund Performance Review September 2008