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Swoon begone! Hedge funds return to winning ways with 1.68% gain in October

Friday, November 12, 2021
Opalesque Industry Update - The hedge fund industry shook off September's swoon in October, posting a 1.68% return for the month, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions.

By comparison, the S&P 500 Total Return Index gained 7.01% in October.

For the year to date, the hedge fund industry was up 10.60% through October. The S&P 500 Total Return Index was up 24.04% over the same period.

Undaunted by the previous month's far-flung red ink, nearly all Hedge Fund subsectors did an about-face in October. The industry's return to gains was led by the Technology Index which was up +4.39%, followed closely by the Distressed Securities Index, up +4.14% and the Emerging Markets Asian Equities Index which advanced +3.84%. Other sub-sectors gaining ground in October included the Equity Long Bias Index, returning +3.02%, the Emerging Markets Sub Saharan Africa Index, up +2.99%, and Option Strategies Index, at +2.16%.

As for the sectors unable to shake off the September slump, they were led by Latin American indices including the Emerging Markets Latin American Equities Index -5.51% and the Emerging Markets Latin America Index -3.96%. Elsewhere the Fixed Income Arbitrage Index retreated -2.07%, the Emerging Markets Global Fixed Income Index lost -1.05%, and the Emerging Markets MENA Index fell -0.51%.

For the year-to-date interval, nearly all sub-sectors are in the black through October. The Emerging Markets Eastern European Equities Index has had a banner year and leads all Hedge Fund subsectors, up +25.91%. The Distressed Securities Index is nevertheless nipping at its heels, posting compound returns of +24.09% year-to-date. Following at a decent distance in third position is the Equity Long Bias Index which is up +17.61% through October.

Other notable year-to-date gainers included the Technology Index, up +16.27%, the European Equities Index, advancing +15.42%, and the Emerging Markets MENA Index, gaining +14.28%.

Only a handful of subsectors have seen year-to-date losses. Woes continued unabated for the Emerging Markets Latin American Equities Index, which has lost -12.21% so far this year, as well as for the Emerging Markets Latin America Index, which has shed -7.05%. The Emerging Markets Global Fixed Income Index and the Fixed Income Arbitrage Index are on the bubble - down -0.48% and -0.18% respectively.

"U.S. equity markets enjoyed their best month of the year in October, and hedge funds benefited," said Ben Crawford, Head of Research at BarclayHedge. "While labor and supply chain issues dragged economies in the U.S. and elsewhere, most hedge fund sectors appeared unaffected, notching October as another victory in a year already full of them."

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