February 07, 2006
Hedge Funds see new growth in 2006
2005 was not a very good year for Hedge Fund managers, with most of them performing badly. Fortunately, the market looks more promising in 2006. The new year started with new opportunities by way of rising oil prices, an increased volatility in the Japanese stock market and some high level deals. Merrill Lynch Hedge Fund Index showed that the average hedge fund was up by 1.17 %.
A wave of take-over bids and restructuring happening in the corporate world has encouraged event driven funds to remain active. Equity and fixed income markets have shown a volatility that favor hedge fund investments. In January 2006, investments in emerging economies dominated the market. Hedge Fund managers see this as a 'phenomenal' start to the new year. CNN Money reports:
Top performing strategies for the month include emerging markets, which invest in the debt and equities of emerging economies. Emerging market hedge funds 'January performance is "just phenomenal," thanks to big economic gains in Latin America in particular, said Larry Smith, chief investment officer of global macro fund Third Wave Global Investors.
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