View the article online at http://citywire.co.uk/wealth-manager/article/a646487
Hedge funds caught out as short selling costs them dear
by Sarah Miloudi on Dec 18, 2012 at 13:06
Hedge funds have been caught out trying to predict crashing stocks, losing 16% through short selling strategies year to date.
According to a fresh analysis, short selling has proved a losing strategy, clocking up the biggest losses of 13 monitored by the EDHEC-Risk Institute.
Short selling strategies shed 1.57% in November alone, according to the analysis, and aside from global commodity trading strategies, which lost 0.08%, no other strategy lost hedge funds money during November.
Despite a number of investors looking to hedge fund trends as a canny way to root out ideas, it is not the first time traders have landed on the wrong side of short trades.
A study published by EDHEC in August found short selling strategies had made nothing.
Year to date, the best strategy was distressed securities, which notched up a 10.7% cumulative return, followed by relative value, which returned just over 8%.
News sponsored by:
As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.
Today's top headlines
From Nigeria to Pakistan and from Kenya to Kuwait, frontier markets are catching investors' attention as never before.
More about this:
More from us
On the road
on Jul 29, 2014 at 13:10