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Global hedge funds suffer worst losses in 18 months

The Hennessee Hedge index which monitors the performance and activity of hedge funds around the world has revealed an average 2.99% loss in the month of May as hedge funds bet on rising market only to be proved very wrong. While the 2.99% loss in the month of May is less than many equity markets there'll be few tears as many people believe that hedge funds exaggerate stock price movements and have been at the center of volatile markets.

While hedge funds are often seen as risky investments, in reality many hedge funds use underlying assets to make their money work harder with relatively little downside. However, there are other hedge funds which are predominantly a gamblers paradise and will bet huge amounts of money on very small movements in indices and stock prices. The very fact that hedge funds are struggling to make money in these markets perfectly reflects the very difficult conditions which are still prevalent around the world.

In many ways the disappointing performance of hedge funds around the world again backs up the fact that any investment should be entered into on a long-term basis. If you can make a profit in the short term then fair enough otherwise you leave yourself open to potential short-term large losses.

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