The computers easily beat out the humans in August. In fact, it was not even close.In the worst August for the stock market in nine years, the average hedge fund eked out a small gain. Many of them were up 1 percent to 2 percent for the month. Guess hedging works. In fact, Hennessee Group figures 43 percent of hedge funds reporting made money in August.
Let’s hear it for Wall Street’s Alpha Men.
However, by far the most successful strategy last month was the one that does not require humans to think, fear a double-dip recession or analyze what the weekly initial jobless claims figures really mean.
In August, systematic trend-following strategies racked up a 5 percent gain, according to HFR. They mostly made money from fixed income — benefitting from worry warts who drove down yields, and short energy exposure and currencies. This offset losses in equities and commodities, according to HFR.
One of the month’s best performers was MAN AHL, which had been struggling of late. It was up about 6.8 percent for the month, bringing its year-to-date return to 7.65 percent. The Tulip Trend fund, whose trading advisor is Rotterdam-based Transtrend, was up 8 percent, lifting its full-year gain to 10.5 percent. Aspect Diversified fund surged 7 percent, putting it up 8 percent for the year.
RIFF fund, Renaissance Technologies’ futures fund, was up less than the group average—rising by 3.33 percent—but for the full year it is up more than 14 percent.
On the other hand, Tudor Tensor lost money for the month, dropping about 0.54 percent, extending its 2010 loss to more than 6.6 percent.
