Sun, Feb 14, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge funds continue positive trend in October

Wednesday, November 10, 2010
Opalesque Industry Update - Hedge funds as measured by the Greenwich Global Hedge Fund Index (“GGHFI”) moved higher for their fourth straight month in October to reach new highs for the year. All major Greenwich hedge fund strategy groups advanced during the month as a result of strong corporate earnings in equity markets and planned quantitative easing from the Federal Reserve. The GGHFI gained 2.35% compared to global equity returns in the S&P 500 Total Return (+3.80%), MSCI World Equity (+3.65%), and FTSE 100 (+2.28%) equity indices. 86% of constituent funds in the GGHFI ended the month with gains.

“Hedge funds were fully on board the rally in October as market volatility temporarily faded into the background,” said Clint Binkley, Senior Vice President. “Strong corporate earnings and telegraphed quantitative easing provided a boost to both credit and equity markets during the month. Hedge funds now have achieved year-to-date returns comparable to benchmark equity indices with half the drawdown of earlier months.”

Long/Short Equity managers were among the best performing hedge funds in October as a result of strong moves in equity markets during the month. The Greenwich Global Long/Short Equity Index advanced 2.67%. Growth managers gained the most on average, rallying 2.79%, and slightly outperformed Value-based funds which gained 2.77%. Opportunistic strategies trailed slightly behind but still gained 2.45%. Short-Biased funds managed to hold their ground despite the broad market moves during the month, gaining 0.58%. Year-to-date, Long-Short Equity managers have performed in line with equity markets with a gain of 6.7%.

Directional Trading funds posted the best results of any strategy group in October, gaining 2.81% on average. Managed Futures funds continued their success from the past two months, gaining 3.56% as quantitative and discretionary models produced positive results. Macro funds also advanced but to a lesser extent, gaining 0.84%, with contributions coming from equity and fixed-income positions.

Market Neutral funds showed positive results across all major strategies in October as the Greenwich Global Market Neutral Index gained 1.55% on average. Event-Driven funds were the best performers, gaining 2.02%. Managers investing in Distressed Securities were the standouts, gaining 2.78%, compared to funds focused on Special Situations which added 2.26%. Merger Arbitrage funds lagged slightly but still gained 0.89%.

Arbitrage Strategies gained across all categories but Convertible Arbitrage funds were once again the best performers, gaining 2.45%. Year-to-date, they are the highest returning arbitrage funds, with a gain of more than 11%. Fixed Income Arbitrage and Other Arbitrage funds also gained 1.09% and 0.45%, respectively in October. Equity Market Neutral managers also experienced one of their best months this year, gaining 1.15% in what has been a lackluster year for this strategy.

Long/Short Credit managers moved higher for their fifth straight month in October, with the Greenwich Global Long/Short Credit Index gaining 0.71% - its fourth straight monthly gain. Bonds continued to hold their ground despite a rally in equities during the month, and hedge funds managers capitalized on trading opportunities. Multi-Strategy funds also posted their best results thus far this year, gaining 1.93%

On a regional level, hedge funds investing in emerging and developed markets posted similar results in the month of October with the respective Greenwich Regional Composite Indices moving higher by 2.31% and 2.33%. In developed markets specifically, funds investing exclusively in North America were the best performers, advancing 2.64%. Funds investing in developed regions in Europe gained 1.86%, slightly topping returns from developed Asian funds which gained 1.67%. Funds investing on a Global basis in developed markets gained 2.28%.

For emerging market hedge funds, Asia was the best performing region for the third month in a row, as funds focused on this area gained 2.74%. Emerging market Europe funds were the next best performers, adding 1.96% on average. South American and Latin American-based hedge funds trailed the group but still gained 0.70%. Year-to-date, the Greenwich Emerging Market Composite index still trails the Developed Market Index by more than 200 basis points.

(press release)

The GGHFI is one of the oldest benchmarks of the hedge fund universe. Final Strategy and Regional index results for October will be available early December, once additional funds have submitted returns. Past performance and index construction rules for all Greenwich Hedge Fund Indices may be viewed at www.greenwichai.com.

About Greenwich Alternative Investments Greenwich Alternative Investments, LLC (and its affiliates) manages one of the world’s largest hedge fund databases and is among the oldest providers of hedge fund indices, asset management services, and research to institutional investors worldwide...Full performance table: Source
-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. Asia - Hedge fund manager Kyle Bass estimates China's foreign reserves below critical level[more]

    From Nasdaq.com: Investor Kyle Bass stepped up his attack on China's currency, arguing in an investor letter distributed Wednesday that the second-largest economy's foreign reserves are "already below a critical level." The comments mark the latest effort by hedge funds and other investors to raise

  2. Investing - Some hedge funds want to make subprime auto loans next big short, 11 hedge funds that are “all in” on the FANG stocks, Hedge funds short London luxury homes, Cynet raises $7 million from U.S. hedge fund[more]

    Some hedge funds want to make subprime auto loans next big short From Bloomberg.com: A group of hedge funds, convinced they have found the next Big Short, are looking to bet against bonds backed by subprime auto loans. Good luck finding a bank willing to do the trade. Money manage

  3. Investing - Hedge funds see selloff in European bank stocks as buying opportunity[more]

    From WSJ.com: The massive selloff in European bank stocks and bonds is overdone and presents a “phenomenal” buying opportunity, according to some of Europe’s top hedge-fund managers. Despite a 28% slump in European bank stocks this year, including a 38% fall in Deutsche Bank AG and a 34% drop in Soc

  4. Legal - Carlyle accused of fraud by ex-employee, Hedge funds win CDS breach of contract suit against Deutsche Bank, Hedge fund asks for OK on $27.5m Goldman CDO deal, SFO examines Barclays hedge fund profits[more]

    Carlyle accused of fraud by ex-employee From AI-CIO.com: A former portfolio manager claims he was fired for blowing the whistle on “crazy” and “irresponsible” investments. Carlyle Group has been sued by a former portfolio manager for one of its hedge funds, who accused the firm of “knowi

  5. Illiquid assets are all the rage for hedge funds[more]

    From Valuewalk.com: …Institutional investors are increasingly turning to illiquid assets and active management strategies to combat macroeconomic trends, anticipated market volatility and diverging monetary policy, according to a new survey by Blackrock. And this week, Bloomberg has reported that at