Opalesque Industry Update - Hedge funds secured another positive return in October, with many styles proving profitable as risk appetite remained positive on the expectation of an imminent announcement of further quantitative easing (nicknamed ‘QE2’) by the US Federal Reserve according to Man, one of the world's largest listed hedge fund providers.|
Equity markets continued along the same bullish path in October as in September. However, speculation that any monetary easing in the US would be less than anticipated weighed on investor minds, with additional concern from some over an unexpected month-end interest rate rise in China. Nevertheless, the MSCI World Index ended up 2.8% with robust performance from Materials, Energy and Information Technology as the release of better-than expected Q3 earnings buoyed market sentiment.
Anthony Lawler, Head of Portfolio Management at Man’s multi manager business, said: “Hedge funds posted another month of positive returns across all styles in October, with managed futures and global macro in particular continuing to deliver strong performance.”
Other key conclusions from Man Multi-Manager’s monthly hedge fund research:
- Managed futures managers provided standout returns in October, with the imminent prospect of QE2 and strong Q3 corporate earnings allowing many long-term trend followers to capitalise on a continuation of some recent strong market trends. Gains were driven mainly through long exposure to commodities, helped in part by the weakened US dollar.