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70% of Hedge Funds Report Losses in May

FAIRFIELD, Iowa, June 13, 2006 – More than 70% of hedge funds lost money in May, according to flash estimates from the Barclay Group. The average loss was 3.09%.

“Broad declines across equity-based strategies resulted in widespread hedge fund losses in May,” says Sol Waksman, founder and president of The Barclay Group.

In May, 11 of Barclay’s 18 hedge fund indexes lost value. The Emerging Markets Index dropped 4.73%, Technology fell 3.44%, European Equities lost 3.37%, and the Pacific Rim Index was down 3.24%.

“Rising interest rates have been draining liquidity from global capital markets,” says Waksman. “As a result, market participants have become risk averse and equity prices are in retreat.”

“Directional equity strategies took the brunt of the losses, reflecting price declines in the stock markets of industrialized and emerging economies.”

Overall, the Barclay Hedge Fund Index lost 1.78% in May. The average gain for hedge funds with a positive return was 1.41%.

“Arbitrage strategies held up well during the month, with most hedge funds in those sectors recording profits,” says Waksman.

Returns for hedge funds employing short strategies jumped 4.97% for the month. Convertible Arbitrage was up 1.11%, Distressed Securities gained 1.12%, Fixed Income rose 0.62%, and the Multi Strategy Index gained 0.52%.

Click here to view ten years of Barclay Hedge Fund Index data.

Sol Waksman, an experienced media source, provides perspectives on hedge fund and managed futures trends. For more commentary, call Sol at 641-472-3456 or email

The Barclay Group, founded in 1985, actively tracks more than 5,400 hedge funds and managed futures programs. Barclay has created and regularly updates 18 proprietary hedge fund indexes and eight managed futures indexes. Institutional investors, brokerage firms and private banks worldwide utilize Barclay’s indexes as performance benchmarks for the hedge fund and managed futures industries.