Hedge Funds Weathered U.S. Storm

Oct 18 2013 | 11:15am ET

For two weeks, at least, hedge funds have had the better of the broader markets.

The HFRX Global Hedge Fund Index rose 0.5% in the first two weeks of October, Hedge Fund Research reports. During the same period, the Standard & Poor's 500 Index actually lost ground, as stocks whipsawed during the U.S. government shutdown and fears of a U.S. sovereign debt default.

With the end of the impasse on Wednesday night, the S&P shot back into record territory. It is unclear whether hedge funds followed.

The HFRX index is up 4.82% for the year through Oct. 14, and all but three of the strategies tracked by the index suite were up during the first half of the month. Fundamental value funds added 1.01% (11.82% year-to-date), equity hedge funds 0.97% (7.71% YTD), emerging markets funds 0.93% (1.7% YTD), fundamental growth funds 0.93% (1.69% YTD), special-situations funds 0.82% (15.12% YTD), equity-market neutral funds 0.78% (0.3% YTD), North American funds 0.69% (9.79% YTD) and event-driven funds 0.64% (11.58% YTD).

Multi-region funds rose 0.49% (4.64% YTD), merger arbitrage funds 0.46% (3.32% YTD), macro funds and commodity-trading advisers 0.39% (down 2.3% YTD), convertible arbitrage funds 0.38% (10.05% YTD), master-limited partners 0.29% (18.37% YTD), credit funds 0.26% (5.96% YTD) and distressed restructuring funds 0.17% (4.86% YTD).

Multi-strategy relative-value funds shed 0.12% during the two weeks (up 0.05% YTD). Relative-value arbitrage funds and systematic diversified CTAs each fell 0.01%, with the former up 1.72% on the year and the latter down 4.04%.


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Editor's Note