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Attached is the summary of hedge fund returns for October 2013. It was a good month for hedge funds.
The highlights are:
- October was the second best month of 2013 for hedge funds. Returns were driven by equity exposure and supported by the continued decline in U.S. rates following their peak in September.
- Credit strategy returns showed noticeable deviations in October. Outsized performance from distressed exposures supported some losses from rate arbitrage and long/short strategies. MBS funds posted another consistent month, but returns are consistently below their pre-May/June rate spike levels.
- Macro funds make recent investor flows look smart. After receiving over $8 billion in new allocations in Q3, despite relatively poor returns for the year, the group has posted their second consecutive strong month and their best since January.
- Systematic strategies have emerged from negative territory for 2013, but remain a drag on industry returns. With systematic strategies removed, hedge funds would be on pace to return nearly 12% in 2013.
- Emerging markets posted a second consecutive strong month led by Africa/Middle East focused funds. That segment of the industry has returned over 20% in 2013 making it one of, if not the best segment of the hedge fund industry this year.
