Hedge fund performance slipped into negative territory during October, which masked pockets of strength in some hedge fund sectors, according to the eVestment October 2014 Hedge Fund Performance Report.
While aggregate hedge fund performance was just slightly down at negative 0.06 percent, the distribution of returns was one of the largest in nearly three years, highlighting large gains and losses produced during the month.
Managed futures funds, particularly the largest managers, benefited from recent global market volatility, according to eVestment.
Those managed futures funds managing over $1 billion are now among the best performing segments of the industry in 2014, only behind India-focused funds.
Emerging market strategies were positive in October, with funds focused on India again benefiting from the country’s post-election surging equity markets.
The India group of hedge funds has returned an average of nearly 55 percent in 2014, far better than the next best emerging market exposure of Africa and the Middle East at 7.9 percent.
While market volatility has increased over the last two months, eVestment has stated that “systematic strategies have greatly outperformed funds whose positions and directional market exposures are fully at the discretion of managers”.
Event driven funds are no longer among the industry leaders for 2014, according to the report. Activist strategies led to the downside in October, and are “in-line” with the broad industry for the year.
Finally, credit strategies produced the lowest aggregate returns of any market exposure in October, the universe’s second consecutive monthly decline.
This is the first time credit strategies have dropped for two straight months since the onset of Europe’s sovereign crisis in mid-2011.
