Tags: Hedge | funds | hit | skids

WSJ: Many Hedge Funds Hit the Skids in March

Monday, 07 Apr 2014 10:44 AM

By Dan Weil

March wasn't a kind month to many hedge funds, which suffered from soured bets on stocks, especially in the technology sector, The Wall Street Journal reports.

In the last week of March, stock hedge fund returns posted one of their worst weeks compared to the S&P 500 index since 2001, according to Goldman Sachs, the paper reports. Among tech stocks most widely-held by hedge funds are Facebook, Amazon.com and Yahoo, Goldman says.

Equity hedge funds' bullish stock positions slumped 1.9 percent in March, according to Morgan Stanley, The Journal reports.

Editor's Note: Secret Wall Street Calendar Uses Strange ‘Crash Alert System,’ Gets 18.79% Annual Returns

Hedge funds' bearish stock positions earned 0.6 percent last month, the worst performance compared to the broader stock market in more than five years, according to Morgan Stanley.

The S&P 500 generated a total return of 0.84 percent in March and 1.81 percent for the first quarter.

Among individual funds, Andor Capital Management, once one of the largest technology stock hedge funds in the world, plummeted 18 percent in March, according to The Journal.

Discovery Capital Management, which manages $15 billion, saw its main fund drop 9.3 percent. Both funds have losses for the year to date, people familiar with the firms told the paper.

Hedge funds are borrowing record amounts of money to finance wagers that stocks around the world will keep rising, Reuters reports. That, of course, means that a correction could turn nasty if hedge funds sell en masse.

"There are caveats, but the truth is: it [the borrowing] is high, and it is very dangerous," Andy Ash, a director at Monument Securities, told Reuters.

Editor's Note: Secret Wall Street Calendar Uses Strange ‘Crash Alert System,’ Gets 18.79% Annual Returns

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