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For Hedge funds, Flat Is the New Up

FLAT is the new UP: still a tough month for hedge funds. Hedge Fund Research reports that Equity Market Neutral hedge funds (basically long/short funds) were down 0.4 percent in June, versus an S&P 500 decline of about 5 percent.

For the year, those funds are down 0.3 percent, and while this may seem like a reasonable outperformance compared to the drop of 7.6 percent (before dividends) in the S&P, remember these funds can go long AND short the markets. Exclusively short funds were UP 3.73 percent for the month.

One sell-side trader told me yesterday that most of the hedge funds he covers were flat for the year, and that they were grateful to just be flat. "Flat is the new up," he said.

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