NEW YORK (HedgeWorld.com)–Hedge fund managers active in directional and event-driven strategies led the S&P Hedge Fund Index to post a gain of 0.72% for October.
The gain signals a slight comeback for the index, which has been posting small gains over the last three months after a slump earlier in the year. Still, the hedge fund tracker is up only 1.15% for the year through October.
“A broad-based U.S. market, led by mid-cap growth stocks, helped produce strong performance among U.S. managers,” said Charles Davidson, senior hedge fund specialist at Standard & Poor’s, in a statement. European managers generally were hurt by their net long exposure to natural resources, according to Mr. Davidson.
For those focused on long/short equity, managed futures and macro strategies the markets worked in their favor. The S&P Directional/Tactical Index, which is made up of those strategies, reported a gain of 1.45% last month. The weakening U.S. dollar against the Swiss franc, Japanese yen and the euro might have helped macro managers and others in the index.
Rising crude oil and natural gas prices undoubtedly were a boon to managed futures managers, with the S&P Managed Futures Index returning 5.56% for the month and 0.27% for the year, topping the overall sub-indexes. The directional/tactical index is still in negative territory for the year, down 1.11%.
The S&P Arbitrage Index dipped in October by 0.13% as returns for equity market neutral managers continue to drag performance for the index. Fixed income-oriented managers fared better, thanks to mortgage-backed securities traders who took advantage of a relatively stable prepayment environment and low volatility trends. For the year the arbitrage index is up just 1.76%.
The S&P Event Driven Index outperformed the composite index with a gain of 0.86% in October. Distressed and special situation investing contributed to the gain with the positive reevaluation of a number of companies in the energy and industrial sectors, according to S&P officials.
Equity long/short managers performed positively, with the S&P Equity Long/Short Index gaining 0.50% for the month.
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