Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Hedge funds caught out as short selling costs them dear

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%. 

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Dispelling the sustainable investing myths

Dispelling the sustainable investing myths

There's a bit of a buzz around sustainable investing at the moment. We speak to three wealth managers to find out what they think.

Play Inside ETFs: positioning for the Fed rate rise

Inside ETFs: positioning for the Fed rate rise

Natalie Fast discusses how investors are using ETFs to position for a rate rise with guests Irene Bauer from Twenty20  Investments and Markit's Simon Colvin.

Play Wealth Manager Retreat: video highlights

Wealth Manager Retreat: video highlights

The UK's leading wealth management talent gathered at our annual event at the Grove celebrate the best in private client portfolio management.

Wealth Manager on Twitter