Hedge fund struggled to keep pace with equity markets in September, with the Hennessee Hedge Fund Index gaining 3.18% during the month (20.89% YTD). At the same time, the S&P 500 increased 3.57% (17.03% YTD), the Dow Jones Industrial Average increased 2.27% (10.66% YTD), the NASDAQ Composite Index advanced 5.64% (34.59% YTD), and the Barclays Aggregate Bond Index advanced 1.05% (5.72% YTD). “Hedge fund managers we talk to are concerned that the markets are rallying while the real economy is shrinking,” said Charles Gradante, co-founder of hedge fund advisory the Hennessee Group.   more »

The quality of overseas money being invested in Indian stocks seems to be getting better. Despite the return of foreign institutional investors (FIIs) to the market chasing a zooming Sensex, the bellwether Indian equity index that has gained 77.53% since January, the exposure of hedge funds to local stocks has dipped significantly. This could mean that the overseas money currently being invested in Indian stocks is here for the longer term. According to Singapore-based hedge fund tracker Eurekahedge Pte Ltd, hedge fund assets in India were $6-7 billion (Rs28,740-33,530 crore today) at the end of August, sharply down from $18 billion at the end of December 2007, at the height of the bull run. The Sensex hit its lifetime high of 21,206.77 in January 2008.   more »

Hedge funds have made a mint this year betting on gold, and they hope their latest big commodity bet is just as sweet. Hedge funds are investing in raw sugar futures in a big way, Bloomberg News reports, helping to double the price of the white stuff since the spring. Sugar last week traded at a 28-year high. According to the U.S. Commodity Futures Trading Commission, long bets on sugar are up 77% this year.   more »