A lot of big-name buy-side players have moved into cash. Bloomberg reports that no less than Steven Cohen, of SAC Capital Advisors, and Paul Tudor Jones, of Tudor Investment Corp., have been selling assets to raise cash. SAC apparently is now 50 percent in cash. Other hedge funds have been doing much the same. But for all the concern and worry about the hedge fund industry. The fact remains that on average they are not far from the main indices. Morningstar says its U.S. equity hedge fund index underperformed the S&P 500 in September. Going forward this is a vexing time to be in the business. Hedging may be proving difficult, given the temporary short ban and the high valuations we're seeing in the CDS market. All this is understandable but represents yet another puncture hole in the twin notions that hedge funds will make money in good markets and bad and that they thrive on volatility.  

For more:
- here's the Bloomberg article