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Hedge Funds Remain Positive in October as CTAs Also Post Gains – November 2013

by Selina Sy

  • 21 Nov 2013
  • HF

Preqin’s preliminary benchmarks indicate that single-manager hedge funds across all regions and strategies posted a gain of 1.54% for October, bringing year-to-date returns (YTD) to 8.75%. This is compared to 7.66% posted for the same period in 2012 and represents an encouraging start to Q4. According to early data, all major hedge fund strategies tracked by Preqin posted gains at the end of the month. Long/short strategies were the main contributors to the industry benchmark, posting 1.81% for October and aggregating 11.14% for the year so far, which currently exceeds the industry benchmark. Event driven funds are still leading as the best performing strategy this year, posting 1.49% for October and 12.41% YTD. Hedge funds employing multi-strategy and relative value strategies also performed well this month returning 1.45% and 1.35% respectively and macro strategies stayed positive by posting 0.94% for October, bringing YTD returns for this strategy to 1.51%. Hedge funds with a focus on emerging markets enjoyed an encouraging month, generating a preliminary figure of 2.08% for October. Despite this, funds targeting emerging markets continue to lag other regional hedge fund benchmarks and are currently underperforming, posting 5.39% for 2013 so far compared to 9.03% for the same period last year. Single-manager hedge funds targeting Europe and Asia-Pacific also contributed favourably this month, posting gains of 2.02% and 1.94% respectively. The Asia-Pacific region remains the top performing regional benchmark, posting 13.97% YTD. This is followed by funds with a focus on North America, which posted 1.63% for October and 13.36% YTD.

According to Preqin’s early benchmarks, multi-manager funds also posted gains this month with an overall average of 1.38% for October, making it the best month for funds of hedge funds since January. This brings the YTD to 6.08% compared to 3.45% posted for the same period last year. Long/short strategies were the main drivers of the benchmark and were up 1.77% for October, outperforming multi-strategy funds, which gained 1.21%.
UCITS hedge funds reporting to Preqin generated a preliminary figure of 1.74% across all regions and strategies, making it the second best month this year after January (+1.86%). This brings the industry benchmark to 5.94% YTD. Funds employing long/short strategies outperformed other UCITS strategies tracked by Preqin, posting 2.57% for October and gaining 10.35% for 2013 so far. By comparison, macro strategies and relative value strategies generated smaller gains of 0.88% and 0.62% respectively.

Following a five-month streak of negative returns, CTAs performed positively, posting an overall average of 1.10% for the month. Though encouraging, this fails to compensate for the losses seen throughout the year and the benchmark is down 1.00% YTD compared to a gain of 0.88% for the same period last year.

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