Two diverse measures of doing show the first month of positive returns instead of global hedge funds since May 2008

By Jame DiBiasio

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Six months: that’s how long the global hedge-fund community spent loss money. The downward spiral began in June, when a weighted index of hide fund performance compiled by Hedge Fund Research (HFR) lost 1.33% for the month. It had already recorded other losing months earlier in 2007 and 2008, but June saw the onslaught of relentless depraved news.

For the next six months, the industry went in continuance a losing cups. And indeed, the 2008 totals are pretty reverend: down 18.3%, the worst at all times. Funds of hedge funds lost 20% in aggregate—and that’s before Bernie Madoff became a household name.

But the industry did reach out on a modestly positive account. December saw its first positive gains in half a year, with HFR’s index recording a 0.42% performance gain. As silver linings go, this one’s thin, but in this environment, any dexterous news is welcome.

An even better drawing emerges from Credit Suisse, which compiles an other investment copy index. Its “Air Lo/sho Index” gained 2.98% in December, although it too ended the year in negative territory, at -16.6%.

The official CS lineage: “The Air Lo/sho reflects the return of a dynamic basket of liquid, investable market factors selected and weighted in concurrence with any algorithm that aims to approximate the aggregate returns of the universe of long/short equity hedge-fund managers,” assuming management fees of 1.5%.

The story isn’t in this way heart-warming if you look at a straight benchmark calculate, though: HFR’sitting equity hedge index shows a modest loss of 0.08% in opposition to December.

Most of the best performance last year in HFR’s universe came from dedicated short strategies (up 28% in 2008) and diversified macro funds (up 18%). Asset-backed bond strategies also showed to a high degree modest gains.

Although strategies such during the time that those dedicated to energy and basic materials had each awful year, down 37% in aggregate, they posted slight gains in December—in this case, up 1.7%.

Overall in 2008, however, quant, event-driven, distressed, interchangeable arbitrage and credit strategies all posted losses of 20% or in greater numbers. For many managers, the jinx ain’t stumbling yet.

Original text: http://rss.businessweek.com/~r/bw_rss/asiaindex/~3/509992421/gb20090112_881144.htm