Opalesque Industry Update - The Eurekahedge Hedge Fund Index was down 0.65%1 in November amid larger declines in global markets. Risk aversion remained high during the month with the Euro zone debt crisis continuing to dominate investor sentiment. Although the month started with gains in equity markets, mid-month trend reversals and a strong rally at month’s end made it a tough investment environment. The MSCI World Index2 witnessed losses of 3.22%.|
Key highlights for November:
Most regional indices finished the month in the red, with the exception of North American hedge funds which were flat to slightly positive. After the strong rallies in October, a number of North American managers had indicated low net exposures for November to protect gains from the previous month. This cautious positioning helped the managers during most of the month while the last day rally, driven by the surprise move by central banks to provide liquidity, had mixed results. The S&P 500 declined 0.51% during the month.
Among other regions, Latin American and European hedge funds fared better than their Asian counterparts, with returns of -0.27% and -0.48% respectively. Similar to North American hedge funds, European hedge funds maintained low net exposures through the month, helping managers to avoid significant losses in a highly volatile environment. Early sell-offs were triggered in the markets by the possibility of a Greek referendum. November witnessed some significant events such as changes in the Greek and Italian governments, and failure of the ‘super-committee’ to reach an agreement on budget cuts, which drove the market swings. The MSCI Europe Index3 was down 4.96%.
Full press release and performance table: Source