Sat, Apr 19, 2014
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   |   
Banner
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. Opalesque Exclusive: Classic Auto Funds Limited (CAF) launches several car investing funds[more]

    Bailey McCann, Opalesque New York: A new trend in alternative alternatives is emerging - car appreciation funds. Classic Auto Funds Limited (CAF) is the first to market with several funds that make super elite luxury cars into real asset investments. As a result of growing overseas demand couple

  2. CTAs could face new challenges in a rising rates environment[more]

    Bailey McCann, Opalesque New York: CTAs have taken a beating performance wise lately, and asset flows reports show that investors aren't sticking around to see how the movie ends. Now, a new white paper from Roy Niederhoffer and Coen Weddepohl notes that as interest rates start to tick back u

  3. Investing – Big hedge funds bought Puerto Rico's junk bonds, Fidelity explores new trading venue amid flash trade concerns, Crisis-era Greek bonds reward early buyers with big effective returns, Cargill unit discloses stake in Freddie preferred[more]

    Big hedge funds bought Puerto Rico's junk bonds From Reuters.com: Several large hedge funds doubled down on Puerto Rico in last month's giant bond sale despite the U.S. territory's financial struggles, the Wall Street Journal reported, citing confidential documents reviewed by the newspa

  4. Opalesque Exclusive: Hedge fund replicators evolve[more]

    Bailey McCann, Opalesque New York: Hedge fund replicators as a group of products tend to get a bad rap from hedge fund managers who suggest that the best a replicator can offer is dynamic beta capture. A

  5. Commodities – Popular value fund manager David Iben bets on Russia, gold,[more]

    From Reuters.com: With large bets on Russia and North American gold miners, one of the best performing stock pickers in the wake of the 2008 financial crisis is back with a new fund that reflects his deep aversion to following the crowd. In the Kopernik Global All-Cap Fund, David Iben is follo