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Hedge Funds’ Cold October Dip

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Stockholm (HedgeNordic) – eVestment, the leading provider of institutional investment analytics, intelligence and data worldwide, has announced its findings for the month of October in its most recent hedge fund industry report. The average hedge fund industry performance globally was -0.76% in October, with +3.70% YTD.

October was the first aggregate decline for the hedge fund industry since the beginning of the year, ending eight months of consecutive positive returns, with investor interest, the report says, generally being misplaced and highly negative credit fund flows.

Commodity fund performances shifted back to the negative territory witnessed in the last two months of summer, falling 0.99%. The universe remains in positive territory for the year, but recent returns are already impacting investor sentiment, with redemptions an increased possibility following October.

Managed futures also experienced a third consecutive month of losses, with large funds mainly responsible for the downside. Managed futures flows were generally positive, but they have been unable to deal effectively with dominant market trends.

Distressed hedge funds experienced positive October returns, situating them as an industry leader for the year, despite the negative investor inflows for the past year and a half. Average returns from the strategy last month pushed YTD performance near +10%.

Multi-strategy funds stand to gain in Q4 from very slight positive returns in October at a time when most markets are down. Broad equity market declines led to a stop in gains for Activist Hedge Fund Managers in October, but the strategy remains well positioned by comparison to other industry segments. Finally, the troubles for long/short equity managers are set to continue after a weak start to Q4, and a difficult year overall.

Emerging markets are continuing to benefit from more exposure to Brazil and India, positive investor sentiment and returns driven by regional equity market gains. China funds, however, are lagging in 2016, after additional setbacks in October.

eVestment’s October report is available here.

 

 

 

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Glenn Leaper, PhD
Glenn Leaper, PhD
Glenn W. Leaper, Associate Editor and Political Risk Analyst with Nordic Business Media AB, completed his Ph.D. in Politics and Critical Theory from Royal Holloway, University of London in 2015. He is involved with a number of initiatives, including political research, communications consulting (speechwriting), journalism and writing his post-doctoral book. Glenn has an international background spanning the UK, France, Austria, Spain, Belgium and his native Denmark. He holds an MA in English and a BA in International Relations.

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