Hello, volatility! In late February, as the stock market went into freefall, leaving television pundits stammering into the cameras, hedge funds with quality short positions profited handsomely. On a single day that month, February 27, the S&P 500 dropped 3.47%, taking away some gravy from long positions. But that same move aided many short positions, especially those in subprime lenders.
Even as the U.S. equity markets suffered - with the S&P 500 plunging 2.19% for the month and the Russell 2000 dropping 0.79% - the Absolute Return U.S. Equity Index climbed 0.51% in February (not quite equalling its 0.9%