Hedge funds produced a “barely positive” aggregate return of 1.19% in October, meaning they made a loss of 0.8% on a year-to-date basis.
However, there were some notable areas of strength in October and throughout the year, according to Peter Laurelli, of eVestment, which monitors hedge fund performance.
Equity hedge funds participated in October’s market rally, though at a “muted” pace with a return of 3.25% from all equity strategies and 3.48% from directional equity. This brought year-to-date returns to 0.17% and 0.43%, respectively.
Emerging market hedge fund strategies rebounded in October, led by funds focused on China’s markets. However, despite October’s 3.63% increase, emerging market hedge funds remain down -3.18% year-to-date through October.
China-focused funds increase their returns in October and brought year-to-date return into positive territory with 6.02%.
Distressed hedge funds are in the midst of “one of their worst years on record”, says Laurelli. October’s decline of -0.74% was the universe’s fifth consecutive monthly decline. At -5.11% for the year, distressed hedge funds are the industry’s worst performing major strategy.
Laurelli says hedge funds have had a “tumultuous” year.
©2015 funds europe