Friday, 25 July 2014
Last updated 4 hours ago
Nov 8 2013 | 11:03am ET
Hedge funds rode last month's market rally to post nearly across-the-board gains in October.
Hedge Fund Research's HFRI Fund Weighted Composite Index added 1.48% on the month, which saw the Standard & Poor's 500 Index rise more than 4.5%. The HFRI benchmark is up 7.19% on the year.
All but one of the myriad strategies tracked by the HFRI suite gained ground in October. The exception was short-bias, which fell 1.95% to extend its 2013 losses to 15.67%.
Emerging markets funds led the way last month, gaining 2.45% (4.66% year-to-date); Asia ex-Japan and Latin America funds did especially well, returning 2.75% (7.03% YTD) and 2.58% (down 2.61% YTD).
"The environment for hedge fund investing continues to improve into the fourth quarter, with strong equity and credit market trends complemented by increased investor risk tolerance, improved traction in macro currency and commodity strategies, and effective positioning and hedging across fixed income based strategies," HFR president Kenneth Heinz said. "While many of the same economic and political risks that have defined financial market performance over the past five years still remain, improved clarity and progress on these have contributed to an environment which is rewarding and opportunity-rich for fundamentally based, mean-reverting strategies. We expect an improved contribution from macro and CTA hedge funds complementing gains across other strategies to drive hedge fund industry gains into year end and early 2014."
Quantitative directional funds added an average of 2.67% (9.3% YTD), Russia and Eastern Europe funds 2.43% (4.43% YTD), global emerging markets funds 2.12% (3.48% YTD) and equity-market neutral funds 2.08% (5.92% YTD).
Equity hedge funds returned 1.8% in October (11.27% YTD), event-driven funds 1.5% (10.03% YTD), distressed and restructuring funds 1.42% (10.68% YTD), energy and basic materials funds 1.27% (1.6% YTD), convertible arbitrage 1.24% (7.71% YTD), relative-value funds 1.19% (5.93% YTD), macro funds 1.09% (down 0.9% YTD), asset-backed funds 1.01% (7.64% YTD), multi-strategy funds 0.98% (6.37% YTD) and merger arbitrage funds 0.71% (4.03% YTD).
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…