Hedge Fund Performance Estimates For October And YTD, As Hedge Fund Assets Hit Massive $2.4 Trillion
Hedge Fund Net has released its preliminary October HF performance breakdown by strategy. Aside from the winners and losers (biggest winners were not surprisingly funds focused on the bubbling Emerging Markets space, the losers were short-biased funds), the notable news for October is that following a sizzling QE2-hype driven September in stocks, engineered in part to prevent redemptions and liquidations, HFN reports that allocations to HFs surged to the highest in 2010, as assets in the hedge fund community hit what we believe is a record $2.4 trillion. In a way this is merely compensation for outflows from traditional retail fund outflows, which as we have been documenting have hit nearly $100 billion for the year, as the rich continue to benefit from Bernanke's economic policies (which is what they are at this point), as everyone else, who has just a token stake in stocks, continues to suffer and withdraw capital for maintenance requirements.
Full highlights from HFN:
- The HFN Hedge Fund Aggregate Index was +2.23% in October and +7.43% in the first ten months of 2010. The S&P 500 Total Return Index (S&P) was +3.80% in October and +7.84% YTD.
- Hedge fund assets increased an estimated +3.04% in October to $2.410 trillion. Performance accounted for an estimated net increase of $52.7 billion and net investor flows added an additional $18.4 billion.
- The core rate of industry growth (% of asset increase due to net investor flows) in October was the highest rate of 2010, +0.79%.
- October was the fourth month in a row of net investor inflows following the industry’s first net outflow of 2010 in June. The continuation of net inflows is an important sign of support as the trend in the first half of the year was of declining rates of growth.
- October performance was driven by the anticipation of quantitative easing by the U.S. Federal Reserve as commodity focused funds performed best, followed by emerging markets and equity focused strategies. Fixed income funds lagged, but were broadly positive.
- Only short biased and Japan focused funds produced negative average performance in October.
October and YTD 2010 Benchmark Performance:
Emerging Market Benchmarks:
HFN Brazil Index: +2.51% in October, +10.64% in 2010
HFN China Index: +3.45% in October, +5.59% in 2010
HFN India Index: +1.46% in October, +17.54% in 2010
HFN Russia Index: +2.43% in October, +11.28% in 2010
HFN Latin America Index: +2.47% in October, +10.16% in 2010
HFN MENA Index: +2.75% in October, +11.18% in 2010
Emerging Market Debt: +0.68% in October, +7.83% in 2010
Emerging Market Equity: +2.59% in October, +11.00% in 2010
HFN Emerging Markets Index: +2.72% in October, +12.94% in 2010
Broad and Developed Market Benchmarks:
HFN Asia Index: +1.54% in October, +5.48% in 2010
HFN Europe Index: +1.81% in October, +5.06% in 2010
HFN North America Index: +2.50% in October, +8.30% in 2010
HFN Australia Index: +4.78% in October, +6.92% in 2010
HFN Japan Index: -0.35% in October, +0.14% in 2010
HFN U.S. Index: +2.42% in October, +7.98% in 2010
Fixed Income (FI) Strategies
All Fixed Income Strategies: +0.95% in October, +9.84% in 2010
Corporate Bond Strategies: +2.07% in October, +11.72% in 2010
Government Bond Strategies: +0.44% in October, +6.02% in 2010
HFN Distressed Index: +2.35% in October, +11.56% in 2010
HFN Mortgages Index: +0.09% in October, +17.06% in 2010
HFN Fixed Income Arbitrage Index: +0.39% in October, +9.31% in 2010
Equity (EQ) Strategies
All Equity Focused Strategies: +2.27% in October, +6.63% in 2010
HFN Long/Short Equity Index: +2.18% in October, +5.76% in 2010
HFN Market Neutral EQ Index: +1.13% in October, +3.01% in 2010
HFN Short Bias Index: -1.65% in October, -9.62% in 2010
HFN Energy Sector Index: +3.22% in October, +10.28% in 2010
HFN Healthcare Sector Index: +0.66% in October, +5.06% in 2010
HFN Technology Sector Index: +4.37% in October, +21.97% in 2010
Financials Equity Strategies: +0.87% in October, +1.53% in 2010
Natural Resource Equity Strategies: +3.49% in October, +9.99% in 2010
Real Estate Equity Strategies: +0.55% in October, +0.88% in 2010
Commodity and Foreign Exchange (FX) Related Strategies
Foreign Exchange Strategies: +0.34% in October, +4.93% in 2010
Financial Futures Strategies: +1.94% in October, -1.60% in 2010
Commodity (Non-FX) Strategies: +3.91% in October, +8.43% in 2010
HFN CTA/Managed Futures Index: +3.17% in October, +6.09% in 2010