Emerging Managers Total Index Up 4.22% In October (+4.25% YTD), Hedge Fund Strategies Back In Positive Territory In 2011

Opalesque Ltd., a leading provider of online information services to the alternative investment industry, today announced the estimated October results for its series of indices tracking emerging hedge fund and managed futures fund managers. Calculations are based on currently 307 funds listed in the Emanagers database, the industry's only database dedicated exclusively to hedge fund management firms less than 48 months old and with assets under management of less than $600 million at the time of the firm's inception.

According to a first estimation, the Emanagers Total Index, consisting of both hedge funds (65%) and managed futures funds (35%), gained 4.22% in October and is up 4.25% year to date. Since January 2009, the index has performed exceptionally well, returning 34.5% in 2009 and 18.73% in 2010, adding to a cumulative return of 66.49%. Funds listed in the Emanagers Database thus outperformed all major hedge fund indices as well as equities.

Hedge funds profited from last month's strong market rally, with the Emanagers Hedge Fund Index gaining 6.22%. The index is now back in positive territory (+0.33%) year to date. Managed futures strategies posted mixed results and a flat overall performance for the third month in a row. However, the Emanagers CTA Index is still up 11.90% for the year after a gain of over 13% in July.

Although emerging manager hedge funds outperformed the Eurekahedge Hedge Fund Index over the last 12 months, they were much more volatile. Analysis of the beta coefficient also shows that emerging manager hedge funds had a higher market risk over the last year than their established counterparts, driven by both volatility and correlation.

By contrast, Emanagers managed futures funds had an exceptional year, returning 11.9% year to date. Although managed futures strategies were even more volatile than hedge funds in the analyzed period, equity market beta was only 6%, as the funds' investment strategies are virtually uncorrelated with the global stock market, with an empirical correlation coefficient of 0.07.