Hedge funds have been holding their own amid the severe market swings of the past week, with the Dow Jones Credit Suisse Core Hedge Fund Index declining only -3.66% month-to-date through Aug. 14. By comparison, the Dow Jones Industrial Average fell -11.58% in that time, and the S&P 500 declined -13.18%.

Year-to-date, the Core Hedge Fund Index is down -4.54%, compared to the Dow’s -5.96% decline and the S&P 500’s -9.83% fall.

“Despite challenging conditions, hedge funds appear to have so far been effective in their attempt to provide a level of capital preservation, and overall have limited losses relative to perceived riskier asset classes such as equities,” said Oliver Schupp, president of Credit Suisse Index Co.

Brian Peterson, head of the hedge fund index group at Credit Suisse Asset Management, added: “Considering the diversity of managers within the Dow Jones Credit Suisse Core Hedge Fund Index, actions and adjustments vary, but, in general, many managers were effectively de-risking in more of a strategic rather than tactical way by reducing net exposure in the weeks, or even months, preceding the correction. At this point, protecting the portfolio seems to be a clear focus, and we see that with many funds holding higher than average cash levels—with some putting that excess buying power to work by adding short positions.”