Early estimates indicate the Dow Jones Credit Suisse Hedge Fund Index will post its best year-to-date performance in September, gaining 3.23 per cent for the month.
Nine out of the ten sectors posted positive performance as a result of global market rallies.
The industry is up 5.78 per cent for the year, outperforming global markets as represented by the Dow Jones Global Index, which have posted gains of 2.89 per cent year-to-date.
Equity focused managers experienced positive performance due to global equity market rallies. Long/short equity managers posted their biggest gain since May of 2009, finishing up 4.50 per cent for the month. Managers with high net exposures led performance and many funds increased their market exposures as the month progressed.
Equity market neutral funds gained 4.30 per cent as market correlations dropped from their record highs managers and managers capitalised on short term price reversals.
Emerging markets funds were also among the top performers this month finishing up 4.68 per cent. Performance in the space was largely led by equity-focused managers which benefited from market rallies in emerging Asian and Latin American markets. FX positions also contributed positively to the month’s gains.
The event driven sector also finished in positive territory as increasing investment opportunities began to arise around special situations. All three sub-sectors performed well this month with risk arbitrage up 3.88 per cent driven by the recent increase in M&A activity.
Global macro was up an estimated 2.63 per cent as managers increased their risk exposures in the FX markets and seized opportunities in the commodities space. Many managers with long AUD positions were able to capture significant gains as the Aussie rallied to an all time record high.