Hedge fund M3 Partners of Salt Lake City notched its best returns during the financial crisis, gaining more than 32% in 2008 and 2009. Bets it made on a swath of highly-capitalized community banks have backfired as banks have sold off broadly. The $265 million hedge fund has lost 12.8% for the year through July, its worst year so far—and that is one of the stronger returns for a financials fund this year. Hedge funds that invest in banks are getting bloodied this year, leading to double-digit losses and shutdowns for some funds. The KBW Nasdaq Bank Index has fallen 33.0% this year; the S&P 500 is up 5.8%, including dividends.

Source: Wall Street Journal August 19, 2020 09:35 UTC