Hedge Funds Flat In October

Nov 13 2009 | 12:22pm ET

One of the strongest years in hedge fund history may be drawing to a quiet close. The average hedge fund was essentially flat in October, according to the Credit Suisse Index Co.

The Credit Suisse/Tremont Hedge Fund Index rose just 0.17% last month, according to early estimates. The index is up 15.16% on the year, one of the lower figures among major hedge fund indices.

Dedicated short-bias funds enjoyed one of their few bright spots in a year of stock-market rallies, rising 5.75% in October. That’s no surprise, given the 1.9% decline in the Standard & Poor’s 500 Index, but the strategy is still down 18.53% on the year.

With the markets struggling in October, long/short equity hedge funds fell 1.18% last month (15.3% year-to-date). Only managed futures funds did worse on the month, shedding 2.23% (down 6.25% YTD), with equity-market neutral funds the only other strategy in the red in October, down 0.53% (up 4.7% YTD).

Fixed-income arbitrage funds also posted a strong October, rising 2.49% (24.98% YTD), as did convertible arbitrage at 1.9%, which remained far-and-away the strongest performer on the year at 45.64%. Emerging markets funds rose 1.37% last month (26.37% YTD), while multi-strategy funds added 1.05% (21.93% YTD).

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