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Hedge Funds Reported up 1.1% to 1.73% in October

New York (HedgeCo.net) – The Dow Jones Credit Suisse Hedge Fund Index posted its largest monthly gain since April and finished up 1.73% in October. A new monthly commentary offers insight into hedge fund performance through the month of October.

Some key findings from the report include:

  • Equity and credit based strategies such as long/short equity, emerging markets, event driven, and distressed were some of the top performers in October. However, the strategies remain in negative territory year-to-date;
  • Tactical trading managers showed a bifurcation in performance as global macro managers posted positive performance while, on the purely systematic side, managed futures funds posted negative performance, largely due to losses from trend-following models; and
  • On the relative value front, fixed income arbitrage managers posted a small gain despite the volatile interest-rate environment while convertible arbitrage and multi-strategy managers benefited in part from their equity and credit components.

Morningstar also reported preliminary hedge fund performance for October 2011 as well as asset flows through September. The Morningstar MSCI Composite Hedge Fund Index, an asset-weighted composite of nearly 1,000 hedge funds in the Morningstar database, rose 1.1% for the month of October, significantly lower than the MSCI World NR Stock Index’s surge of 10.3%.

“Though most strategies posted positive figures in October, hedge funds overall failed to fully participate in the equity market’s massive rebound in October,” said Josh Charney, alternative investments analyst at Morningstar. “The abruptness of the market’s reversal, coupled with lingering bearish sentiment, likely caught some defensively positioned managers off guard.”

Editing by Alex Akesson
For HedgeCo.net
alex@hedgeco.net
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