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Volatile markets take a toll on hedge fund performance in September

Wednesday, October 13, 2021
Opalesque Industry Update - Aggregate performance for the global hedge fund business dipped into negative territory in September, at -0.55%, according to the just-released eVestment September 2021 hedge fund performance figures. This is only the second month this year the industry posted negative aggregate returns and just under 40% of funds eVestment tracks posted positive returns last month, the lowest level since September of last year. Year to date (YTD) hedge fund industry performance stands at +8.85%.

"This is a dramatic change from August of this year, when more than 67% of funds reported positive returns," said eVestment Global Head of Research Peter Laurelli. "Major equity and credit markets had a bumpy month in September and that clearly took a toll on the hedge fund business. The dispersion of returns in September was the largest since March of this year, which means there were still many funds within various segments and categories we track that performed well during the month."

Among primary hedge fund markets eVestment tracks, Commodities funds were big performance winners in September, at +1.59%. These funds' YTD performance stands at +17.93%, among the strongest performances of any type of hedge fund eVestment tracks.

Event Driven - Activist funds were the biggest performance losers in September among primary hedge fund strategies eVestment tracks, coming in at -2.75%. However, these funds are strongly in the green YTD at +19.99%. With performance at -2.28% in September, Origination & Financing funds were also poor performers among primary strategies last month. With their YTD performance at only +3.96%, Origination & Financing funds have much less wiggle room to post positive full-year performance.

Among primary markets eVestment tracks, Equity-focused hedge funds were big performance losers in September at -1.35%. These funds are still strong performers YTD, however, at +10.45%. The pain in equity markets was also felt in most of the equity fund sub-segments eVestment tracks. Funds focused on technology, financials and healthcare equities were all in the red for September, although for technology and financials only slightly. Among these sub-sectors, only Equity-Energy focused funds saw positive performance in September, at +1.85%. Equity-Energy focused funds are also among the strongest performers this year, with YTD returns standing at +22.45%.

India-focused funds were among the strongest performers in September, at +1.54%, and are the strongest performing fund segment eVestment tracks YTD at +42.97%. Conversely, Brazil-focused funds were the biggest performance loser in September, at -5.56% and YTD returns for these funds sit at -8.58%.

"While there is a lot of red in the September performance figures, the industry as a whole is doing well with year-to-date performance," said Laurelli. "It will be interesting to see what the last quarter of the year brings for the business."

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