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Laxman Pai, Opalesque Asia:

Hedge fund performance was dragged lower last week by high beta strategies such as L/S Equity and Special Situations, Lyxor said in its Weekly Brief.

According to Lyxor's Cross Asset Research, low beta strategies such as Merger Arbitrage, Relative Value Arbitrage, L/S Equity Market Neutral and CTAs outperformed.

On a month to date basis, CTAs also underperformed due to the trend reversal across asset classes earlier in the month. But trend followers were largely spared by the sell-off last week, it said.

"Based on a sample of 192 liquid funds with data up to October 24th, we provide a deeper perspective on the impact for hedge funds of recent market developments. The overall picture is similar to the one provided by liquid hedge fund benchmarks," Lyxor said.

Negative impact on L/S Equity and Special Situations strategies

L/S Equity and Special Situations strategies were the most negatively impacted by the selloff in October due to their elevated beta. Low beta strategies discussed above outperformed while CTAs stood in between.

"As usual in such market conditions, there were outliers: we saw a Global Macro strategy up 17% month to date, a short-term CTA up 7% and a L/S Equity strategy up almost 5%. The worst performing strategy was a global L/S Equity, down 13.5%," Lyxor added.

"Going forward, we think that equities are unlikely to enter a bear market in the medium term. But th......................

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