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Komfie Manalo, Opalesque Asia:

The hedge fund industry fell 0.57% in Q3 but still outperformed S&P 500, according to the latest Bank of America Merrill Lynch’s weekly Hedge Fund Monitor.

The report added that CTAs (commodity trading advisors) were the top performers in the last quarter with 4.8% gains while event driven funds performed the worst down 3.0%. S&P 500 index was down 0.7% during the same period on a price return basis.

"Our models indicate that Market Neutral funds decreased market exposure to 8% net long from 13% net long. Equity Long/Short market exposure increased to 36% net long from 34% net long; in line with the 35-40% benchmark level. Macro hedge funds increased their long exposure in S&P 500 and NASDAQ. They increased their long exposure to USD and 10-yr and increased their short exposure to commodities. Overseas; they decreased their emerging market long exposure," the report said.

According to BoFA, large speculators sold Russell for a fourth week to increase net short position to a new five year high. However, net short position is less than half of the historical maximum and can increase further. Specs also increased NASDAQ net long to largest in six months. BoFA said it expects the trend in both to continue further.

Large speculators bought gold in small amounts after six weeks of selling. Speculators increased copper shorts and sold silver fo......................

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