HFRI: Hedge Funds Up 1.6% In Sept.

Oct 11 2013 | 9:06am ET

Hedge funds enjoyed broad gains in September, although the returns suffered towards the end of the month amidst well-founded fears of a U.S. federal government shutdown.

Hedge Fund Research's HFRI Fund Weighted Composite Index rose 1.6% on the month and is up 5.58% on the year. The Standard & Poor's 500 Index added nearly twice as much in September and is up nearly 20% in 2013.

Still, a rising tide lifts almost all boats, with 19 of the 22 strategies tracked by the HFRI suite in positive ground. Technology and healthcare funds, buoyed the upcoming debut of the exchanges mandated by President Barack Obama's healthcare law, jumped 4.38% in September (17.37% year-to-date). Emerging-markets funds also enjoyed a strong month after the Federal Reserve maintained its bond-buying levels, rising 3.26% on the month (2.07% YTD). Latin America funds were especially strong, adding 3.7% (down 5.36% YTD), followed by Russian and Eastern European funds at 3.24% (1.2% YTD) and Asia ex-Japan funds at 3.22% (3.3% YTD).

"Hedge funds were well positioned for the dynamic environment which materialized in September, from the equity gains and falling yields on the Fed no- taper decision, through the significant German elections, the healthcare stock leadership on Affordable Care Act and into the equity market selloff on the US budget deliberations into month end," HFR president Kenneth Heinz said. "Equity hedge and event-driven funds are on pace for the strongest gains since 2009 and these continue to attract investor interest through the evolving macro political environment."

Energy and basic materials rose 2.85% on the month (0.94% YTD), equity hedge 2.61% (9.17% YTD), event-driven 1.99% (8.98% YTD), quantitative directional 1.45% (6.85% YTD), relative-value 1.44% (5.05% YTD), distressed and restructuring 1.31% (9.4% YTD), multi-strategy 1.28% (5.82% YTD), convertible arbitrage 1.07% (6.46% YTD), merger arbitrage 0.9% (3.36% YTD) and equity-market neutral 0.42% (3.69% YTD).

Short-bias funds took the biggest hit in September, dropping 2.59% (down 13.61% YTD). Systematic diversified funds fell 0.45% (down 3.45% YTD) and macro funds 0.19% (down 2.09% YTD).

The HFRI Fund of Funds Composite Index added 1.91% in September and is up 5.56% on the year.


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