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Hedge funds take a turn for the worse

Hedge funds have taken a dip due to issues in the wider markets, according to performance figures gathered at the end of May.

Despite a strong start to the month, hedge funds took a nosedive in the latter half of May, with managed futures, global macro and equity long/short funds hit the hardest due to price falls in stocks, oil and metals, according to analysts.

Morgan Stanley Investment in New York said that while a few funds were up, many of the larger ones were down "double digits", including the Boyer Allan investment fund, valued at around $1 billion, down around ten per cent at the end of May, Bloomberg figures show.

Experts fear that the decline may prove to be the steepest since November 2000 when loosely regulated investment funds recorded an average dip of 3.49, despite a strong first quarter for the funds, although there was no need for immediate concern, they said.

"Although May has been a tough month, the bigger picture for the first five months of the year is still very good,'' Morgan Stanley's Bohart told Bloomberg.

Chicago-based hedge fund analysts Hedge Fund Research reported investment flows in the first quarter took the value of the funds to a combined $1.2 trillion.