Tue, Sep 1, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Morningstar 1000 Hedge Fund Index rose 5.2% (est.) in September (5.11% YTD), single-manager hedge funds saw $1.3bn in inflows in August

Friday, October 22, 2010
Opalesque Industry Update - Morningstar, Inc., a leading provider of independent investment research, today reported preliminary hedge fund performance for September 2010 and asset flows through August. September closed out a profitable quarter for hedge funds. The Morningstar 1000 Hedge Fund Index rose 5.2% in September and 7.6% over the third quarter, while the currency-hedged Morningstar MSCI Composite Index climbed 2.8% for the month and 4.3% for quarter.

"Hedge funds ended the third quarter with a bang," said Nadia Papagiannis, alternative investment strategist for Morningstar. "All strategies profited, as equities, bonds, commodities, and currencies rallied."

U.S. stocks, as measured by the S&P 500 Index, experienced their best September in 71 years, on the news of more potential easing by the Federal Reserve and better than expected economic data with payrolls and manufacturing. The Morningstar U.S. Equity Hedge Fund Index rose 6.0% in September against the S&P 500's 8.9% climb. European stocks, as measured by the MSCI Europe NR Index, increased 11.0%, as positive GDP and sentiment data outweighed credit concerns over Ireland and Portugal. The Morningstar Europe Equity Hedge Fund Index rose 7.8% during the month.

In mid September, the Federal Reserve's statements suggesting continued quantitative easing triggered a U.S. dollar freefall against several currencies and near-record lows in two- and five-year Treasury yields. This provided trading opportunities for funds in Morningstar's Debt Arbitrage and Global Non Trend Hedge Fund Indexes, which gained 3.6% and 4.0%, respectively in September, and 6.6% and 4.6% for the quarter. The U.S. dollar's plunge contributed to the rise in several commodities, including gold, silver, sugar, and cotton. Funds in Morningstar's Global Trend Hedge Fund Index, which profit from price trends in commodity futures and other derivatives, saw a 6.1% rise in September, their best month since early 2008.

Hedge fund of funds in the Morningstar's database also posted their best results since 2008. The Morningstar Hedge Fund of Funds Index outpaced the Morningstar Multi-Strategy Hedge fund index by almost a full percentage point in the third quarter of 2010, after having underperformed in the previous six quarters.

Merger and acquisition activity picked up in the third quarter of 2010, particularly in emerging markets and the energy sector. Funds in the Morningstar Corporate Action Hedge Fund Index, which engage in strategies such as merger arbitrage, rose 4.3%. Acquisition activity through leveraged buyouts helped to spur new corporate high-yield debt issuance, which almost broke 2009's year-long record this month. The appetite for high-yield bonds and risky assets in general boded well for funds in Morningstar's Distressed Securities Hedge Fund Index, which increased 2.6% in September. Volume in convertible bond issuance also improved in the third quarter, especially in Asia. The Morningstar Convertible Arbitrage Hedge Fund Index climbed 7.4% in the three months ending September 30.

In addition to a favorable market environment in September, hedge funds also appear to be back in favor with investors.

After two months of net outflows, single-manager hedge funds in Morningstar's database saw $1.3 billion in inflows in August. Convertible arbitrage hedge funds attracted the most assets in August, $773 million. For the year to date through August, hedge funds in the database have leaked $4.4 billion, although funds in the Global Non-trend, U.S. Equity, and Corporate Actions categories experienced inflows of $3.3 billion, $1.4 billion, and $1.2 billion, respectively.

September returns for the Morningstar Hedge Fund Indexes are based on funds that reported as of October 18, 2010. September returns for the Morningstar MSCI Hedge Fund Indexes and August asset flows are based on funds that reported as of October 13, 2010. Hedge fund investors, managers, consultants, and advisors can access additional information through the Morningstar(R) Alternative Investment Center(SM), formerly Morningstar(R) Altvest(SM), the company's research platform designed specifically for hedge funds, or Morningstar Direct(SM), the company's global research platform for institutions.

Morningstar has approximately 11,000 hedge funds and funds of hedge funds in its database. The Morningstar 1000 Hedge Fund Index, a global, broadly representative benchmark for hedge fund performance, has return history from January 2003. The index comprises the top 90% of eligible assets in Morningstar's hedge fund database. For the purposes of the index, Morningstar counts funds with shared portfolios as a single hedge fund; funds of hedge funds are excluded from consideration. The index is updated daily for the previous month-end, rebalanced monthly, and reconstituted semi-annually. In addition, Morningstar has 17 category indexes and four broad category indexes based on Morningstar's strategy-specific classification system for hedge funds. Morningstar's hedge fund indexes are not investable.

(press release)


Full performance table: Source


About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of Internet, software, and print-based products and services for individuals, financial advisors, and institutions. Morningstar provides data on approximately 360,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 4 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. The company has operations in 21 countries... Corporate website: www.morningstar.com

-KM

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Hedge funds suddenly find real money is back in Argentina's debt, Elon Musk buys more SolarCity stock following hedge fund manager short, BlackRock plans to get into rental-home financing[more]

    Hedge funds suddenly find real money is back in Argentina's debt From Bloomberg.com: The real money is back in Argentina. Before the country’s default in July 2014 (its second in 13 years), most long-term investors abandoned its bond market. As they rushed out, Argentina became a favorit

  2. Activist News - Carl Icahn has snapped up a huge stake in Freeport-McMoRan, and the stock is ripping, Meet Europe's best activist investor[more]

    Carl Icahn has snapped up a huge stake in Freeport-McMoRan, and the stock is ripping From Businessinsider.com: Carl Icahn has picked his next target: Freeport-McMoRan. Icahn and a group of other investors have snapped up an 8.46% stake in mining company Freeport-McMoRan, according to a j

  3. North America - Hedge fund manager Ray Dalio’s challenge to the Fed[more]

    From Newyorker.com: For some reason, Janet Yellen, the chair of the Federal Reserve, decided to skip this year’s annual Fed conference in Jackson Hole, where monetary policymakers from the United States and abroad get together with some prominent academics to discuss the big issues of the moment. Th

  4. Opalesque Exclusive: Credit-focused hedge fund Numen Capital expects more volatility in Europe in coming months[more]

    Benedicte Gravrand, Opalesque Geneva: A London-based hedge fund, which has just hired two emerging managers, is cautious on Europe. Vassilis Paschopoulos and former Lehman’s colleague Nikos Kargadouris, launched a London-based credit-focused hedge fund called

  5. Performance - Hedge funds bruised by stocks’ meltdown, Capstone’s volatility hedge fund is having a monster month thanks to market mayhem[more]

    Hedge funds bruised by stocks’ meltdown From WSJ.com: Hedge-fund managers like to promise their investors protection from market swings. In the recent stock swoon, many were caught off guard. Billionaire managers such as Leon Cooperman, Raymond Dalio and Daniel Loeb are deeply in the red

 

banner