It's been a shocking three months for hedge funds. Now while most of us would crack open a bottle to celebrate Wall Street's smartest investors getting hammered, it's also a warning for anyone with retirement pensions or playing the market.
The BBC reports that according to Hedge Fund Research's HFRX Global Hedge Fund Index, funds fell 0.94% on average in June and 2.79% in the three months ended June, the worst second-quarter performance since 2000 when the industry lost 3.42%.
According to Bloomberg, hedge funds are now frozen in the headlights and have scaled back trading. The traders who are supposed to be the cream of Wall Street's investment community now say there is too much volatility and they don't know which way the market is heading. They need more detail on how the US economy is tracking and on the fiscal positions in Europe. And if they don't know, who does?
Not a good sign for markets and the global economy.
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