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MSCI Indexes Show Small Gains in October

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NEW YORK (–Hedge fund performance was up slightly last month, with directional trading strategies topping the MSCI Hedge Fund Composite and Process Group indexes.

The composite index gained 0.8% with 65% of funds reporting their October returns by Nov. 10. The hedge fund index has yet to surpass the MSCI World Equity Index though, which went up by 2.4% in October.

Strategies that speculate on the direction of currency, commodity, equity and bond prices helped to boost the hedge fund composite index. Housed within the MSCI Directional Trading Index those funds gained 2.1% last month, but the sub index was the only one to be down for the year through October with a loss of 0.8%.

The MSCI Specialist Credit Index was the next best-performing MSCI index with a boost of 1.1% last month. This index includes credit funds that may handle distressed securities, long/short credit strategies and private placements.

The MSCI Multi-Process Group Index went up 1% in October and has returned 6% for the year. Multi-Process funds mainly are event-driven offerings.

The MSCI Security Selection Index gained 0.8% in October. Security Selection index managers are long/short equity focus, targeting investments that offset systematic market risks.

Strategies that take bets on spread relationships between financial assets and commodities didn’t fare well last month, as they lost 0.1% for the MSCI Relative Value Index. For the year, the same group of managers had a slight gain of 1.5%, according to MSCI.

According to MSCI officials, the firm’s database totals more than 1,900 hedge funds, with the indexes representing more than US$240 billion in hedge fund assets.

Contact Bob Keane with questions or comments at: [email protected]