New York (HedgeCo.Net) – Morningstar has reported preliminary hedge fund performance for October 2013 as well as estimated asset flows through September. “Global stock and bond markets pulled back in the beginning of the 16-day U.S. government shutdown in October,” AJ D’Asaro, fund analyst at Morningstar, said. “Hedge funds as a whole managed to see through the short term volatility, and every Morningstar MSCI Hedge Fund Index increased during the month.”
The Morningstar MSCI Composite EW Hedge Fund Index rose 1.6% in October and 7.2% for the year through October. Single-strategy hedge funds experienced net outflows of $512 million in September. The systematic futures category led the losses, with outflows of $574 million in September, adding to its growing loss of $8.1 billion through the third quarter. In contrast, global macro hedge funds received net inflows of $646 million.
U.S. equity based hedge fund strategies profited the most as the perceived risk of a U.S. government shutdown and Federal Reserve tapering evaporated. The Morningstar MSCI North America Hedge Fund Index increased 1.6% for the month as the S&P 500 reached new all-time highs. Similarly, the Morningstar MSCI Small Cap Hedge Fund Index, which represents small-cap long-short equity strategies, rose 2.2% in October, while the Russell 2000 Index climbed 2.5%. The Morningstar MSCI North America Hedge Fund Index and the Morningstar MSCI Small Cap Hedge Fund Index have risen 10.6% and 17.4%, respectively, year-to-date through October while the S&P 500 and Russell 2000 Indexes increased 25.3% and 30.9%, respectively.
European equity-focused hedge funds also rallied strongly as earnings across the continent came in higher than expected, and inflation was lower than expected. The Morningstar MSCI Europe Hedge Fund Index advanced 2.2% in October and 9.6% for the year to date, compared with 4.3% and 21%, respectively, for the unhedged MSCI Europe NR stock index. Full report.
Editing by Alex Akesson
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