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Laxman Pai, Opalesque Asia:

Hedge fund performance was flat last week (from 10 to 17 October) and L/S Equity strategies outperformed according to liquid benchmarks, said Lyxor in its Weekly Brief.

According to the report from Lyxor's Cross Asset Research, L/S Equity captured the rebound that others, such as CTAs, did not because of systematic deleveraging. Broader measures of performance also point to the strategy's outperformance year-to-date (up to end-September) versus an overall industry benchmark.

Yet, it has been a difficult year for L/S Equity strategies so far. Alpha generation has lagged most prior years amid risk factor rotations which saw low beta stocks outperforming. Recently, value stocks also staged a rebound and momentum stocks were under pressure.

From a regional perspective, U.S. L/S Equity strategies faced difficulties due to their bias towards growth/ momentum stocks which suffered lately. European L/S strategies fared better as they have lower style biases and lower net exposure than U.S. peers.

Market Neutral L/S strategies fared slightly better month-to-date but, at the difference of diversified L/S Equity strategies (i.e. non-market neutral), they did not rebound since the trough.

"Going forward, a few remarks deserve attention regarding equity risk factors. First, we do not believe in a sustainable rebound of value stocks at this stage of the economic cycle. We still believe in growth/ technology stocks on the back o......................

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