Hedge Funds Scaling Back Risk

With the US economy and the major stock indexes taking a step back, hedge funds are putting their money into more defensive sectors such as utilities and other high dividend stocks.

Some hedge fund manages say that a lot of risk is being taken off the table.

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Duquesne Capital Management to Shut Down

Stanley Druckenmiller of Duquense Capital Management

Dozens of hedge funds have closed already in 2010, and now you can add Duquesne Capital Management to that list. The $12 billion hedge fund run by billionaire Stanley F. Druckenmiller has not had a losing year and has averaged 30 % annually (though the fund is down 5% this year).

Duquesne returned about 11 percent in 2008, when hedge funds on average lost a record 19 percent. It rose about 10 percent in 2009, when the average return was 20 percent.



Druckenmiller is quitting the fund to pursue philanthropic goals.

Metals Hedge Fund to Close

Apollo Management LP, a New York based hedge fund and private equity firm  closed its metals hedge fund in London.

The $40 million into the Apollo Metals Trading Fund started in March 2009, according to a U.S. Securities and Exchange Commission filing. An outside spokeswoman for the firm declined today to say why Apollo shut the fund or to give the number of fund employees.

Commodity hedge funds fell in the first half of 2010 amid sliding commodity prices.