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Below are the key highlights for the month:

Hedge funds delivered the second best monthly performance since May 2003, up 3.45% in September.

Larger hedge funds (AuM>US$500 million) outperformed smaller funds, up 6.35% YTD.

All regions and strategies posted positive returns in September, Greater China hedge funds gained 7.02% during the month.

In terms of regional mandates, hedge funds investing in emerging markets advanced strongly in September, with Asia ex-Japan managers delivering the best performance – up 6.03%. The Eurekahedge Emerging Markets Hedge Funds Index gained 4.20% as the MSCI Emerging Markets Index surged 7.49%. Emerging markets have witnessed strong flows of capital over the last few months, leading to rallies in the underlying equity markets. Asia ex-Japan managers took advantage of the hefty gains across the regional indices – the Hang Seng rose 8.87%, the Sensex gained 11.67% while the Kospi, Shanghai Composite and the Thailand SET also registered healthy returns. Eastern European managers also posted excellent profits, gaining 3.90% on average and bringing their year-to-date returns to 7.21%.

Managers investing in developed markets produced positive returns in September, with North American managers leading the way. The Eurekahedge North American Hedge Fund Index advanced 3.67% for the month while European and Japanese managers gained 2.26% and 0.71%, respectively. The month was marked by increases in most asset classes across geographies. Although the US dollar decreased during the month, heightened risk appetite pushed the S&P 500 up 8.8% while bonds also witnessed a rally in the latter half of the month amid speculation of further quantitative easing by the US Federal Reserve.

Hedge funds of all strategic mandates finished the month with healthy gains. Long/short equity funds delivered the best performance, gaining 4.33% on average, as managers were able to capture most of the upside in the rising markets. Global macro funds and CTA/managed futures funds also posted excellent returns of 3.68% and 3.20%, respectively, as positive movements across most asset classes were profitable for managers. Fixed income strategies also traded higher as increased risk appetite helped distressed debt managers register yet another month of excellent results while a month-end rally in bonds resulted in opportunities for arbitrage, relative value and fixed income managers. The Eurekahedge Distressed Debt Hedge Fund Index continued to lead in the year-to-date measure, up 10.31% September year-to-date.

Full performance chart: Source

(press release)

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