Opalesque Industry Update - Latest figures show hedge funds outperformed global markets by 7.7% in September|
Turbulent conditions and declining equity markets brought with them another month of negative returns for hedge funds in September. The Eurekahedge Hedge Fund Index was down 2.30%1 for the month, though it should be noted that the MSCI World Index fell nearly 10%2 during the same period. More than one-third of all the hedge funds that have reported to the Eurekahedge database for September were in positive territory for the month.
Key highlights for September:
The US Federal Reserve’s announcement of ‘Operation Twist’, on 21st September, did little to sooth investor concerns, and global markets continued to decline further near the month end. North American and European managers were able to provide significant downside protection amid steep declines in the markets, losing 2.10% and 1.99% respectively. The S&P500 declined 7.18% during the month while the MSCI Europe Index was down 11.75%.
Japanese hedge funds witnessed the smallest losses in September, down 0.57%, while the Nikkei lost 2.85%. The Japanese market remained sensitive to global developments during the course of the month and the Nikkei dropped to its lowest point in two and a half years on September 26th, before rebounding on better news from Europe at the month end. Hedge fund managers remained guarded during the month and winning strategies were net-short market positions as well as value investments in the food sector. Managers using options and futures also reported some gains.