Hedge Funds Underperform in August (HedgeCo)
The Hennessee Hedge Fund Index gained +1.05% in August (+2.96% YTD), while the S&P 500 gained +3.77% (+8.39% YTD), the Dow Jones Industrial Average rose +3.23% (+3.15% YTD), and the NASDAQ Composite Index jumped +4.82% (+9.67% YTD). Bonds were also positive on the month, as the Barclays Aggregate Bond Index increased +1.10% (+4.80% YTD). “Normally a slow month, August had its best performance in 14 years.” commented Charles Gradante, Co-Founder of Hennessee Group LLC. “Long/short hedge funds did well at +1.70%. All strategies were positive except for interest rate sensitive (convertible arbitrage, high yield, distressed) and dollar sensitive strategies (emerging markets).”
Singapore hedge fund challenges Japan regulator over insider charge (Reuters)
A small Singapore-based hedge fund accused of insider trading in Japan is disputing the charge, the latest financial institution to brave the odds and challenge the regulator in an attempt to stave off damage to its reputation. Last year, Japan’s Securities and Exchange Surveillance Commission (SESC) accused MAM Pte of acting on an insider tip about a share offering by Nippon Sheet Glass and demanded the hedge fund pay a penalty of 8 million yen ($74,710). The regulators’ case against MAM was based on testimony from Junpei Harino, a former JPMorgan Chase & Co (NYSE:JPM) employee who admitted to passing on information to the fund.
Hedge Fund Manager Accused Of Stealing To Buy Porsche (Finalternatives)
A hedge-fund manager’s taste for luxury cars has proven his undoing. WestEnd Capital Management’s Sean Cooper treated the hedge fund like a personal piggy bank, the Securities and Exchange Commission alleges, siphoning off more than $320,000 in investor funds. More than half of that when towards a “187,000 Porsche,” the SEC said. “Cooper betrayed the hedge fund’s investors by lining his own pockets with fund assets that he had not earned,” the SEC’s Marshall Sprung said. “His fraud went undetected because WestEnd had no internal controls to limit Cooper’s ability to withdraw excessive amounts from the fund.”
Here a bubble, there a bubble: Ol’ Marc Faber (CNBC)
Even after the Dow and the S&P 500 closed at new all-time highs, closely followed contrarian Marc Faber keeps sounding the alarm. “We have a bubble in everything, everywhere,” the publisher of The Gloom, Boom & Doom Report told CNBC’s “Squawk Box” on Friday. Faber has long argued that the Federal Reserve’s massive asset purchasing programs and near-zero interest rates have inflated stock prices. The catalyst for a market decline, as he sees it, could be a “raise in interest rates, not engineered by the Fed,” referring an increase in bond yields.
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