HEDGE FUNDS POST SEPTEMBER GAINS AS FED MAINTAINS STIMULUS
Equity Hedge, Event Driven lead
gains as funds position for US government shutdown; German elections add to
increasing investor risk tolerance, IPO activity builds
CHICAGO,
(October 7, 2013) – Hedge funds posted strong gains in September, as the US Federal
Reserve maintained current bond purchase stimulus measures, German elections
produced favorable results and investors prepared for the US government to shut
down over the budget bill impasse. The HFRI Fund Weighted Composite Index
gained +1.6 percent for the month, the strongest performance since January 2013
and the second highest gain in the last 19 months, as reported today by HFR,
the established global leader in the indexation, analysis and research of the
global hedge fund industry.
September performance was led by
Equity Hedge strategies, with the HFRI Equity Hedge Index gaining +2.6 percent,
also the strongest month since January and bringing performance for the first three
quarters of 2013 to a gain of +9.2 percent, leading all hedge fund strategy
indices. Growth areas including Technology, Healthcare and Emerging Markets all
had strong contributions to performance, with the HFRI EH:
Technology/Healthcare Index up +4.4 percent for the month, and +17.4 percent
for the year through September 30, making it the top performing index for the
period. Fundamental Growth hedge funds gained +3.3 percent for the month, while
the HFRI Emerging Markets Index also gained +3.3 percent.
Event Driven strategies posted
strong performance with the HFRI Event Driven Index gaining +2.0 percent for
the month, driven by record corporate bond issuance, successful IPO issuance
and increasing investor risk tolerance. Event Driven narrowly trails EH as the
leading area of strategy performance for 2013, with a YTD gain of +9.0 percent.
Event Driven performance was fueled by the dynamic environment for strategic
and financial transactions and shareholder activism, with the HFRI ED: Special
Situations Index climbing +3.2 percent for the month, contributing to a YTD gain
of +11.2 percent. Activist strategies also gained +3.2 percent in September and
have gained +11.9 percent in the first three quarters of 2013.
Fixed Income-based Relative Value
Arbitrage strategies posted gains for the month, with the HFRI Relative Value
Index gaining +1.4 percent. RV gains were broad-based across Sovereign, Corporate
and Volatility strategies, with FI: Sovereign gaining +2.6 percent for the
month, while RV: Volatility and FI: Corporate gained +1.9 and +1.5 percent,
respectively.
Macro funds posted a decline for
the month, with gains in Discretionary Macro funds offsetting declines in
Commodity and Systematic strategies. The HFRI Macro Index declined by -0.2
percent for the month, while positive contributions from Sovereign fixed income
and Emerging Markets exposure contributing to a gain of +1.2 percent for
Discretionary Macro managers. The HFRI Systematic Diversified Index declined by
-0.5 percent, with weakness in Commodity exposures. The HFRI Fund of Hedge
Funds gained +1.9 percent for the month, bringing YTD performance to +5.6
percent, in line with the HFRI Fund Weighted Composite Index.
“Hedge funds were well positioned
for the dynamic environment which materialized in September, from the equity
gains and falling yields on the Fed no taper decision, through the significant
German elections, the Healthcare stock leadership on Affordable Care Act and
into the equity market selloff on the US budget deliberations into month end,”
stated Kenneth J. Heinz, President of HFR. “Equity Hedge and Event Driven funds
are on pace for the strongest gains since 2009 and these continue to attract
investor interest through the evolving macro political environment. Despite low
volatility of hedge funds relative to equity markets, institutional investors
are likely to continue increasing their exposure to hedge funds as ED & EH
strategy gains accelerate and investor risk tolerance continues to normalize
through the current period of uncertainty, driving industry growth through year
end and into 2014.”
Learn more at www.hedgefundresearch.com
Learn more at www.hedgefundresearch.com
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