Funds of hedge funds (FOHF) recovered in the second quarter, except for those focused on Asia or emerging markets, according to Standard and Poor's (S&P.)
While the majority of FOHFs are still down over the year to date, losses are generally small and less than for mainstream funds, says the fund ratings service.
According to Randal Goldsmith, director of fund research at S&P, one of the main sources of losses has been from emerging markets and Asia-Pacific equity hedge funds.
“There are fewer hedge fund managers who are good at making money from shorting stocks within the region compared with mainstream markets.
“This did not matter so much in the last bear market because
July and August have been tough months for FOHFs, with many of the managers staying long in energy and other commodities while shorting financials and consumer sensitive stocks, according to S&P.
“However, new money continues to flow into FOHF but definitely slower than last year,” says Goldsmith.IFAonline
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