On the back of the industry’s slowest start to a year in the past 10 years, performance slowed yet further in Q3 2018, with the Preqin All-Strategies Hedge Fund benchmark returning 0.64% (Fig. 1). Despite a slowdown in performance from Q2, North America-focused hedge funds remain the best performing region, returning 1.83% for Q3 (Fig. 4), while hedge funds focused on Asia-Pacific saw their YTD losses slip deeper into negative territory in their worst quarter since Q1 2016.
CTA vehicles bounced back from a negative Q2 by recording their first positive quarter of 2018. Conversely, funds of CTAs struggled: Q3 was their third consecutive quarter of negative returns and their worst quarter of 2018. Alternative mutual funds once again outperformed their European liquid alternative counterparts, returning 1.34% against the 0.11% loss generated by UCITS-structured vehicles over the same period.
During Q3 2018, event driven strategies and credit strategies outperformed all other top-level hedge fund strategies tracked by Preqin, returning 1.61% and 1.13% respectively (Fig. 3). Multi-strategy hedge funds recorded their first negative quarter since Q3 2015, down 0.05% for the period.
*Please note, all performance information includes preliminary data for September 2018 based upon net returns reported to Preqin in early October 2018. Although stated trends and comparisons are not expected to alter significantly, final benchmark values are subject to change.
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