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Komfie Manalo, Opalesque Asia:

Hedge funds fell for the fourth straight months in September with the HFRI Fund Weighted Composite Index down -1.1% last month , the longest such sustained decline since the financial crisis in 2008. Data provider Hedge Fund Research (HFR) said that the performance drawdown of -5.0% since June brings the YTD Index performance through September to a decline of -1.3%, which still tops the S&P 500 by 400 basis points and the DJIA by over 700 bps.

In its monthly report, HFR said that the declines last month were led by equity and credit-sensitive event driven strategies, with the HFRI Event Driven Index posting a decline of -2.5% (-3.22% YTD), led by exposure to positions in Glencore, Valeant and high yield credit. Equity hedge strategies and fixed-income based strategies experienced losses, and gains in macro, CTA and volatility strategies failed to offset the general decline.

"Performance declines in September and recent months reflect expanding hedge fund outperformance of global equities as financial market volatility has increased and equity declines have accelerated," stated Kenneth J. Heinz, President of HFR.

He added, "Hedge fund performance dispersion also recently expanded, with a combination of categorical strategy......................

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