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Hedge fund managers return -0.44% in September

Wednesday, October 27, 2021
Opalesque Industry Update - Hedge fund managers returned -0.44% in September, outperforming the global equity market as represented by the MSCI ACWI (Local) which returned -3.55% during the month. In terms of 2021 performance, global hedge funds were up 8.14%, recording the strongest September year-to-date return since 2009 despite the ongoing pandemic. Around 76.7% of the constituents of the Eurekahedge Hedge Fund Index generated positive returns in 2021.

On an asset-weighted basis, hedge funds returned -0.79% in September, as captured by the Eurekahedge Asset Weighted Index - USD. In terms of 2021 performance, the index is only up 3.18%, highlighting the struggles for some of the larger asset managers over the year.

The Eurekahedge North American Hedge Fund Index returned -0.12% in September, outperforming the pan-European Euro Stoxx 50 which returned -3.53%. Market risk sentiment was dampened due to the developing energy crisis in Europe and the heightened political uncertainty post-Germany elections. On a year-to-date basis, European fund managers were up 7.63%, recording their best September YTD performance since 2009.

The Eurekahedge Japan Hedge Fund Index gained 2.62% in September, supported by the robust returns of the Nikkei 225 which returned 4.85%. Investor sentiment was supported by the hope for a more dynamic and business-friendly government after Prime Minister Yoshihide Suga resigned amid anger over his government's handling of the COVID-19 pandemic. On a year-to-date basis, Japanese fund managers were up 10.11%, recording their best September YTD performance since 2013.

The Eurekahedge Distressed Debt Hedge Fund Index gained 0.92% in September, extending their streak of consecutive positive monthly returns to twelve months. On a year-to-date basis, distressed debt hedge funds outperformed all of their main strategic peers and were up 13.06%, recording their best September YTD performance since 2009.

The Eurekahedge Commodity Hedge Fund Index gained 3.05% in September, supported by the strong return of the S&P GSCI Index which returned 6.03%. Energy was the best performing component in September, posting a return of 11.60% as Brent Crude Oil and West Texas Intermediate Crude Oil surged 9.52% and 9.91% respectively after OPEC+ decided to keep supplies tight despite the ongoing global energy crunch. On a year-to-date basis, commodity hedge funds were up 13.12%, recording their best September YTD performance since 2006.

The CBOE Eurekahedge Long Volatility Hedge Fund Index gained 0.97% in September. Concerns over rising inflation and the China Evergrande debt crisis spurred market volatility, causing a 40.41% surge in the CBOE Volatility Index which supported the performance of long volatility funds. On a year-to-date basis, long volatility hedge funds are still down 7.04% as the index generated negative returns in seven of the first nine months of the year.

Fund managers focusing on cryptocurrencies returned -8.80% in September as tracked by the Eurekahedge Crypto-Currency Hedge Fund Index, outperforming Bitcoin which returned -11.61% over the same period. In terms of 2021 return, cryptocurrency hedge funds have gained 117.42%, outperforming Bitcoin which returned 44.39% over the first nine months of the year.

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