The Dow Jones Credit Suisse Hedge Fund Index gained 1.92 per cent in October and is up 8.02 per cent year-to-date.
Nine out of ten strategies in the index posted positive performance in October as rising global equity, commodity and credit markets provided tailwinds for managers across different strategies.
Managed futures was the best performing strategy for the month, up 4.29 per cent, and is among the top performers in the index for the year at 11.00 per cent. Performance was led by trend followers which generally profited from long exposures to precious metals, equities, agriculture and currencies.
Long/short equity gained 2.00 per cent in October, as managers benefited from a decrease in intra-index stock correlations and higher dispersion in stock prices. As a result of these developments, long/short equity managers generally increased both gross and net exposures during the month.
Global macro managers were up 1.62 per cent in October and led the index in year-to-date performance with 11.10 per cent gains. Managers profited most from fixed income trades, such as US Treasuries yield curve steepeners and long positions in the belly of the curve in response to QE2 expectations.
Event driven managers also had a positive month, generating 1.80 per cent returns for October and 8.22 per cent returns for the year. Managers in the space have generally been shifting focus towards small and mid-cap opportunities as larger companies needing to refinance debt have had easier access to the active capital markets.