The Lyxor Hedge Fund Index was up 0.8 per cent for October, with six out of nine Lyxor indices in positive territory according to the company’s latest Alternative Investment Industry Barometer.
Global Macro funds recovered with all portfolios contributing to the performance. CTAs underperformed, hit by rising bond yields and the strengthening of the USD.
“While 2015/16 proved challenging for active investors, 2017 is offering a much better vintage for the hedge fund industry,” says Jean-Baptiste Berthon (pictured), Senior Cross-asset Strategist, Lyxor Asset Management. “Market drivers were less speculative (fading influence from politics and monetary decisions), which led assets to trade closer to their fundamentals. Firming global growth momentum spurred more directionality. Economic divergences widened across regions, offering more relative opportunities. Major central banks confirmed they will start normalizing their policies. It could lift a key barrier for alpha generation.
“This better backdrop helped hedge funds produce more sustainable alpha throughout the year. They rank favourably against most of their multi-strategy peers in risk-adjusted performance and offered more diversification with less correlation vs. mainstream asset classes and across hedge fund strategies.”