Political Agenda Added Risk To the Hedge Fund Market In October

government+shutdown3New York (HedgeCo.Net) – New research from Eurekahedge shows that hedge funds delivered healthy gains in October as global markets trended upwards during the month.

“US related news dominated global markets for most of the month starting with the 16 day partial shutdown of the government.” The company said, “Political wrangling in the US Congress over the debt limit added risk to the markets, with equities declining at the start of the month. The shutdown was ended mid-month, which saw equities gain traction. Positive macroeconomic data throughout the month as well as the expectation that the US Federal Reserve will postpone tapering added further impetus to global markets.”

Highlights include:

  • Hedge funds raised US$100 billion through asset flows in 2013 as at October year-to-date
  • Total assets in the hedge fund industry reached new record high of US$1.97 trillion
  • Assets in Greater China focused funds reached US$12.9 billion, the highest level on record
  • Asia ex-Japan hedge funds have outperformed the underlying markets by more than 5% October year-to-date
  • Japanese hedge funds remained ahead of other regions, up 22.68% as at end-October 2013
  • Greater China focused hedge funds up 13.77% October year-to-date
  • Distressed debt hedge funds up 13.02% October year-to-date

Hedge fund returns were up for the second consecutive month in October amid trend reversals in the underlying markets. The Eurekahedge Hedge Fund Index was up 1.41% during the month, bringing its year-to-date return to 5.84%. The MSCI World Index gained 3.75% during the month.

Total assets under management (AUM) increased by $19.7 billion during the month, bringing the size of the industry to $1.97 trillion. Most of the positive impact on total assets in October came from performance as managers gained $18.6 billion over the course of the month. The industry also witnessed net positive asset flows of $1.2 billion.

Alex Akesson
For HedgeCo.net
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