Hedge Funds Lag Equity Rebound in October

November 12, 2001 (PLANSPONSOR.com) -Along with stocks, hedge funds finally snapped their three-month streak of losses in October, rising 1.27% on average, according to research and consulting firm the Hennessee Group.

While that trailed the 4.2% average monthly increase registered by stock mutual funds, on a year-to-date basis, Hennessee’s hedge fund index is still up 0.04%, compared with a 19% decline for the S&P 500 and 16.4% for the typical mutual fund.

Sector Stats

Health-care and biotech funds gained 3.9%, while Hennessee’s technology index returned 2.7%, according to the report.

Telecommunications and media funds were the month’s worst performers, tumbling 1.6%, while short funds fell 1.05% in the rising stock market. A month earlier, short funds had registered a 13.37% gain and for the year still tops all hedge categories with a 16.64% gain.

Foreign Fields

Leading the resurgence in October were Latin America funds, up 6.21% in the wake of a resolution on the Argentinean debt crisis. Those funds had September’s worst return, a loss of 14.52%. Emerging markets funds rose 2.6% in October, but European funds fell an average of 1.5%.

The Hennessee index is made up of more than 20 component indices that focus on different geographic regions or strategies. They are all weighted equally, regardless of the amount of investment in each strategy.

– Nevin Adams                        editors@plansponsor.com