long short equity tops hedge fund performance

Long/short equity hedge funds remain on track for their best year since 2009 after another good month of performance in October.

long short equity tops hedge fund performance


The monthly summary report from eVestment shows that hedge funds on average have delivered 7.1% over the first ten months of 2013. This leaves them on course to beat last year’s average of 7.5%. 

In October, directional equity strategies continued to benefit from more buoyant stock markets. However, leadership switched from developed market to emerging market equities. Emerging market-focused hedge funds were 2.7% higher over the month on average, with Africa and the Middle East particularly strong.

Long/short equity funds remain the top performing sector for the year to date, up 12.86%. If this performance continues, the sector will be on track for its best year since 2009, when it was up 26.7%. Over the same period, the S&P 500 is up 23.2%.

Long/short equity and macro strategies continue to be the key beneficiaries of the Federal Reserve’s decision to postpone the tapering of quantitative easing. 

All hedge fund strategies were in positive territory for the month, but commodities was the weakest area, showing an average gain of just 0.09%. The group said that commodity funds in general had struggled to capitalise on the volatility in commodity prices and had suffered from the weakness in the oil price in October. 

Flows into all strategies except Mortgage-backed Securities and Distressed were positive for September. However, they are still negative for the year to date for long/short equity, managed futures and macro strategies. Multi-asset strategies have generally been weak, in contrast to the long-only sector, with $17.7bn leaving this type of strategy so far this year. Managed futures has seen $22.56bn exit in 2013. Credit strategies have proved the most popular – relative value credit has attracted $25.3bn, while directional credit has attracted $26.97bn. 




Latest Stories