The hedge fund industry shook off September’s swoon in October, posting a 1.68 per cent return for the month, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions.
The hedge fund industry shook off September’s swoon in October, posting a 1.68 per cent return for the month, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions.
By comparison, the S&P 500 Total Return Index gained 7.01 per cent in October.
For the year to date, the hedge fund industry was up 10.60 per cent through October. The S&P 500 Total Return Index was up 24.04 per cent over the same period.
Undaunted by the previous month’s far-flung red ink, nearly all Hedge Fund subsectors did an about-face in October. The industry’s return to gains was led by the Technology Index which was up +4.39 per cent, followed closely by the Distressed Securities Index, up +4.14 per cent and the Emerging Markets Asian Equities Index which advanced +3.84 per cent. Other sub-sectors gaining ground in October included the Equity Long Bias Index, returning +3.02 per cent, the Emerging Markets Sub Saharan Africa Index, up +2.99 per cent, and Option Strategies Index, at +2.16 per cent.
As for the sectors unable to shake off the September slump, they were led by Latin American indices including the Emerging Markets Latin American Equities Index -5.51 per cent and the Emerging Markets Latin America Index -3.96 per cent. Elsewhere the Fixed Income Arbitrage Index retreated -2.07 per cent, the Emerging Markets Global Fixed Income Index lost -1.05 per cent, and the Emerging Markets MENA Index fell -0.51 per cent.
For the year-to-date interval, nearly all sub-sectors are in the black through October. The Emerging Markets Eastern European Equities Index has had a banner year and leads all Hedge Fund subsectors, up +25.91 per cent. The Distressed Securities Index is nevertheless nipping at its heels, posting compound returns of +24.09 per cent year-to-date. Following at a decent distance in third position is the Equity Long Bias Index which is up +17.61 per cent through October.
Other notable year-to-date gainers included the Technology Index, up +16.27 per cent, the European Equities Index, advancing +15.42 per cent, and the Emerging Markets MENA Index, gaining +14.28 per cent.
Only a handful of subsectors have seen year-to-date losses. Woes continued unabated for the Emerging Markets Latin American Equities Index, which has lost -12.21 per cent so far this year, as well as for the Emerging Markets Latin America Index, which has shed -7.05 per cent. The Emerging Markets Global Fixed Income Index and the Fixed Income Arbitrage Index are on the bubble — down -0.48 per cent and -0.18 per cent respectively.
“US equity markets enjoyed their best month of the year in October, and hedge funds benefitted,” says Ben Crawford, Head of Research at Barclay Hedge. “While labour and supply chain issues dragged economies in the US and elsewhere, most hedge fund sectors appeared unaffected, notching October as another victory in a year already full of them.”
