Short explanation

18 March 2003 By Chris Hughes

That s one explanation for their poor performance lately. On the other hand, maybe they just shorted the wrong stocks. It’s oversimplistic to say that hedge funds which take net short positions will always outperform a falling market.

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Dedicated shortbias hedge funds returned –1.73% in February, and –4.41% over the last 12 months, according to the latest CSFB/Tremont Hedge Fund Index. Overall, hedge funds returned 0.68% last month, and 1.96% over the year.

The total return of the S&P 500 was 1.50% in February, and

4.08% in the last 12 months, with the MSCI $ World Index delivering a total return of 1.71% and

4.68% in the same periods.

The CSFB/Tremont Hedge Fund Index measures the returns that hedge fund investors make after paying performance fees, and compares these with the total return (including dividend payments) from equities.

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