Emerging Markets Top Hedge Fund Performance In ‘06

Nov 8 2006 | 12:01pm ET

October was a good month for hedge funds. Unfortunately for them, the broader markets had a better month.

A pair of indices showed hedge funds up almost 2% in October, lagging the Standard & Poor’s 500’s 3.15% return for the month. The Hedge Fund Research indices posted a 1.98% gain to hit 9.22% on the year last month—the S&P500 sits at 10.39% year-to-date—while the Barclay Group’s index rose 1.84% on the month.

All but one strategy tracked by HFR rose in October, with emerging markets continuing to lead the way. Asian-focused funds were up 3.45% on the month (16.54% YTD), while those investing in former Soviet-bloc nations rose 1.31% (23.71% YTD, the best of any strategy).

The only loser last month was the HFRI Short Selling index, which dropped 1.27% last month. It is also the only strategy in the red year-to-date, down 1.8%.

Other laggards for the first 10 months of the year include the equity hedge index, which rose 2.09% in October (8.2% YTD), equity non-hedge, with a big October at 3.2% (9.18% YTD), macro 1.35% (4.61% YTD), and relative-value arbitrage, which returned 1.35% on the month (9.12% YTD).

Funds of funds in the HFR indices are also far behind the broader markets, rising 1.56% last month to 6.4% YTD.

Winners on the year so far include convertible bond funds, up 1.34% in October (12.31% YTD), merger arbitrage, which rose 1.66% (11.76% YTD), and event-driven, up 1.73% last month (almost 11% YTD).


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Editor's Note