Hedge Funds Most Susceptible To 2001 NASDAQ-Style Crash

Hedge funds are most susceptible to a 2001 NASDAQ-style crash, according to recent stress tests carried out by research firm eVestment. Stress tests done on 30 hedge funds with a combined $370 billion assets under management found that a crash similar to the collapse of the dot com bubble would cause them to lose 2.29% on average, compared to just 1.59% in the event of a crash similar to the recent global financial crisis, which came in fourth, and compared to the more than 25% that the NASDQ actually lost when the tech sector fell apart.

The market downturn following the 2001 World Trade Center attacks would be the second most damaging event...