The Composite’s gain over the month lagged the MSCI World Equity Index, which advanced 5.83% in October. For the year, the Composite index is up 11.82%, substantially underperforming its World counterpart’s 21.52% return.
Compared to the World Sovereign Debt Index, which lost 0.47% in October, the Composite index had the upper hand. For the year, the World Sovereign Debt Index has now returned 8.62%.
October’s largest process group gainer was the Security Selection Index, which turned in a 2.75% October performance. Security Selection are those managers who combine long positions and short sales with the aim of benefiting from their ability in selecting investments while offsetting systematic market risks. For the year, Security Selection was up 15.36%. Next on the list was Specialist Credit, those funds that seek to lend to credit-sensitive issuers, which reported a 1.89% October return, 18.75% year to date.
Hard on the heels of Specialist Credit was the Multi-Process Group, strategies that focus on spread relationships between pricing components of financial assets or commodities, which showed a 1.88% October gain, 14.89% year to date.
Directional Trading, which was up 1.5% in October, 7.93% year to date, includes strategies based upon speculating on the direction of market prices of currencies, commodities, equities, and bonds in the futures and cash markets. Relative Value showed a 0.84% gain, 5.79% year to date.
The MSCI Hedge Fund Indices are composed of more than 190 indices. More than 1,800 hedge funds have agreed to participate in the database and there are over 1,600 hedge funds currently in the MSCI Hedge Fund Indices and Database.