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The Slaughter Continues: Hedge Funds Tumble In October, Turn Negative For 2014 Despite Central Bank Sticksave
As we reported last week, one of the most notable features of October was not so much the relentless intervention by central banks to prop up the global capital markets Ponzi scheme and send the S&P to fresh record highs - that much should have been apparent years ago - but rather that just as hedge funds were preparing to aggressively capitalize on the first notable downturn in the "market" in years, the carpet was yanked from under everyone's legs, and hedge funds (which by definition "hedge", i.e., put on offsetting, short positions to plain vanilla longs, something for which they are compensated orders of magnitude higher than mutual funds) were slaughtered once again, following the biggest, or as we called it most Historic, short squeeze in 3 years.
Over the weekend, BofA's Ankur Singh picks up on this when he said that "Russell short covering continues.... "
More: "Large speculators decreased Russell 2000 net shorts to -$5.4bn from -$6.1bn notional."
And the abovementioned punking: "Diversified hedge fund index was down 1.7% for MTD till Oct 29, while S&P500 was up 0.5% on a price returns basis. Equity market neutral funds were up 0.8% while Event Driven funds were down 5.2%." Or basically what we have been saying since 2010: when the global central banking cartel is the Chief Risk Officer of what was once known as the market, there is no point in paying anyone 2 and 20 for hedging risk, since there is no longer any risk. And if and when the Fed et al finally lose control, there is nothing that will hedge the subsequent systemic devastation.
The summary breakdown:
And the granular summary of the marquee names: virtually everyone is once again underperforming the S&P, not only for October...
... but for 2014.
This will be the 6th year in a row, when courtesy of central planning, the average hedge fund has barely generated any alpha, and certainly underperformed the S&P 500.
Expect many more Calpers-es to pull out their cash of the hedge fund industry, in turn leading to even more systemic leverage within the shadow banking sector.
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SACRIFICIAL LAMBS
Whats with the lack of Ebola fear porn these days? Wasnt there supposed to be medical martial law by now? What a great Psy-Op.
Not so great if it only lasted 6 weeks.
BTW, maybe a name change is in order:
Zerohedges.com
All I can say is, buy when there is blood in the streets. The green shoots are undeniable to the trained analyst, so if you're distracted by the short term noise, just go back to the data. Jobs numbers are spectacular and the stock market has been indicating strong confidence in the economic recovery.
You forgot "mustard seeds" Kudlow...
ah yes--ye ole green shoots-1 out of 5 on food stamps--lowest participation rate in 30 years-wages flat to down- cost of healthcare exploding higher more than offsetting cheaper gasoline prices-pushing christmas 3 weeks before haolloween--your are right--this shit is great-buying a few more shares of baba
That's right! And Flounder has ebola under control. Foward!
Who trained you, Anal-yst?
There's that "Tulip Trend Fund" again.
What, no "South Seas Fund"?
Has to be fate or the ulitimate irony/insult that the best performing hedge fund YTD starts with the name "Tulip". Not sure what this fund's strategy is but given that one of the greatest bubble manias ever witnessed was the great Tulip bubble in 1637 +/-, it is only fitting that this name appears at the top. Maybe they should think about changing their name to include "Emu" as I believe about 20 years ago a number of people got burned thinking that bird would "fly".
put back the management fees back into the funds and all funds are profitable
there - all fixed
Damned Russian Prosperity Fund... sank my whole portfolio.
In Russia, fund hedges YOU!
I'm Long UNDERGROUND BUNKERS.
The reality is we have a TOTAL FAKE ECONOMY (TFE)
Empty Housing Inventory 40 Million.
Jobs are outsourced to Mexican Immigrants or McJobs < 15$ /hr
Statistics are completey faked, and Obama golfs
Corruption reigns supreme don't be trying to travel with any cash - cops will seize it.
The TFE was brought to you by the TFUG (totally fuck up gubmint)
Worst performing is called the Prosperity Fund? Seems fitting.
Yeah, it's just not your prosperity it's named after!