A volatile month saw aggregate hedge fund performance slip into negative territory during October. But that slightly negative 0.06% performance overall masked some big pockets of strength in some hedge fund sectors, according to the just-released eVestment October 2014 Hedge Fund Performance Report.
According to report author, eVestment Vice President and Head of Research Peter Laurelli, some key points on hedge fund performance from the October report include:
- While aggregate hedge fund performance was just slightly down at negative 0.06%, the distribution of returns was one of the largest in nearly three years, highlighting large gains and losses produced during the month.
- Managed futures funds, particularly the largest managers, benefited from recent global market volatility. Those managed futures funds managing over $1 billion are now among of the best performing segments of the industry in 2014, behind only India-focused funds.
- Emerging market strategies were positive in October, with funds focused on India again benefiting from the country’s post-election surging equity markets. The India group of hedge funds has returned an average of nearly 55% in 2014, far better than the next best emerging market exposure of Africa/Middle East at 7.9%.
- While market volatility has increased over the last two months, systematic strategies have greatly outperformed funds whose positions and directional market exposures are fully at the discretion of managers.
- Event driven funds are no longer among the industry leaders for 2014. Activist strategies led to the downside in October, and are in-line with the broad industry for the year.
- Credit strategies produced the lowest aggregate returns of any market exposure in October, the universe’s second consecutive monthly decline. Credit strategies haven’t dropped for two straight months since the onset of Europe’s sovereign crisis in mid-2011.
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