Hedge Funds Lag in October

November 15, 2002 (PLANSPONSOR.com) - Hedge funds may not have had as much of a bang-up month in October as did equities, but nearly 60% of hedge funds ended the month in positive territory, according to Van Hedge Fund Advisors International (VAN), a hedge fund advisory firm

Van Hedge reported that the Average US Hedge Fund earned 0.9% net in October while offshore domiciled hedge funds also staged a modest rebound, averaging a 0.5% return net of fees. Those gains place the year-to-date returns for the Average US Hedge Fund and the Average Offshore Hedge Fund at -2.8% net and -1.4% net, respectively.

VAN chairman George Van said in a report that hedge funds’ year-to-date performance edged out major benchmarks through October including the S&P 500 (-21.8%) and the Average Equity Mutual Fund (-20.8%). The Average US Hedge Fund had a -2.8% net through October.

Overall, half of the hedge fund strategies in the Index made gains in October, according to the report. The best performing strategies for the month were US Several Strategies, U.S. Emerging Markets and US Value, which posted net gains of 8.6%, 2.8% and 2.2%, respectively.

For the year to date through October, the top performing strategies were:

  • US Short Selling, 31.8% net
  • Offshore Short Selling, 24.6% net
  • U.S. Emerging Markets, 8.8% net.

Not surprisingly, Short Selling and Income were among the worst performing hedge fund strategies in October as the equity markets rallied and bonds fell. US Short Selling lost -3.8% net while US Income fell -1.5% net.

Through September, the Average US Hedge Fund lost 3.6%, according to a Van Hedge Fund Advisors report. (See  Industry Official: Hedge Funds Still Outpace Stock Mutuals ).