Dear Fellow Investor.
Hedge funds outperformed the Standard & Poor's 500 stock market index in November for the first time since May as they benefited from a falling U.S. dollar, sliding bond yields and a rebound in energy prices.
Hedgefund.net returnes were up 2.18% on average last month -- vs. 1.65% for the S&P 500 -- leaving them up 10.65% thus far this year.
An index of managers compiled by Hedge Fund Research climbed 2.45% in November, leaving it up 11.69% this year. Five of the six hedge-fund strategy indexes run by Dow Jones also rose last month.
In May this year, the last time hedge funds performed better than the S&P 500, hedge funds lost 1.46% on average, while the equity index dropped more than 3%.
Hedge funds can bet on falling as well as rising prices. That often means that these funds lag the broader stock market during a period of strong gains. That happened in recent months as the S&P 500 rallied to a six-year high.
Futures Funds, which try to latch onto price trends by trading futures, (find out more about Futures on :
http://www.stockbreakthroughs.com/articles/derivatives.htm
) benefited from a drop in the dollar and rising bond prices. Those types of funds returned 1.75% in November, according to the Barclay Group, which tracks industry performance.
Futures Funds monitored by Hedgefund.net returned 3.05% in November.
A month-long decline in US interest rates drove bond prices higher in November. However, the drop in interest rates may have also added fuel to the U.S. dollar's decline, as the dollar lost ground against the major currencies. Both of these trends were profitable for many futures funds.
A rebound in energy prices also helped hedge funds focused on that sector. Energy hedge funds tracked by Hedge Fund Research gained 4.41% in November, leaving them up 16.59% so far this year.
Yours in Successful Trading
Ricky Schmidt
www.stockbreakthroughs.com