Hedge funds added 1.34% in October as they attempt to finish an uneven 2010 on a strong note, according to the Dow Jones Credit Suisse Hedge Fund Index.
Early estimates have the benchmark up 7.41% on the year, well ahead of the Standard & Poor's 500 Index, which is up 6.11%. All but one of the Dow Jones/Credit Suisse strategy benchmarks was up last month, led by managed futures funds with an estimated average return of 3.46% (10.11% year-to-date).
Coming in a distance second were long/short equity and event-driven multi-strategy funds, both up 1.75% on the month. The former is up 4.29% on the year and the latter 8.66%. Enjoying nearly as strong an October were convertible arbitrage funds, which added an estimated 1.74% (9.4% YTD).
The only loser last month was dedicated short-bias, which has continued to be blasted by the equity market rally. The strategy shed a further 3.07% in October and is now down 15.17% on the year. Only one other strategy is in the red year-to-date, equity market neutral, which is down 0.86% after rising 0.09% last month.
By contrast, three strategies are in double-digits for the year with two months to go. Fixed-income arbitrage funds are up 10.62% after rising 0.78% last month, global macro funds are up 10.48% (1.07% in October) and managed futures funds are up 10.11%.