Hedge funds deliver healthy gains

Hedge funds delivered healthy gains in October as global markets trended upwards during the month. The Eurekahedge Hedge Fund Index was up 1.40% during the month, while global stock indices outperformed as the MSCI World Index gained 3.75% in September.

Read: Want returns? Choose alternative investments

Key highlights include:

• Hedge funds raised US$100 billion through asset flows in 2013 as at end-October
• Total assets in the hedge fund industry stand at US$1.91 trillion, set to cross the highest level on record by end-2013
• Assets in Greater China focused funds reached US$12.9 billion, the highest level on record
• Asia ex-Japan hedge funds have outperformed the underlying markets by more than 5% October year-to-date
• Japanese hedge funds remained ahead of other regions, up 22.68%

Regional Indices

Equities gained traction after the U.S. shutdown ended. Positive macroeconomic data throughout the month as well as the expectation that the U.S. Federal Reserve will postpone tapering, added further impetus to global markets.

Read: Regulators don’t understand diversification

All regions posted positive returns for the month with Asia ex-Japan focused funds delivering the strongest gains for a second consecutive month. The Eurekahedge Asia ex-Japan Hedge Fund Index was up 2.03%. Hedge funds focused on India and Australia/New Zealand delivered the strongest gains amid strongly rallying markets — the BSE Sensex was up 9.21%, while the ASX All Ordinaries Index gained 3.88%.

Greater China focused funds gained 1.67%, while the Hang Seng was up 1.52% and the Shanghai Composite declined 1.52%. Asia ex-Japan remained ahead of the underlying markets year-to-date, with gains of 8.65%, in comparison the MSCI Asia Pacific ex-Japan Index, which is up 3.18%.

Read: What clients find on Google: Mutual funds

European hedge funds were up 1.67% — the underlying markets were supported by positive macroeconomic data, industrial production strengthened and economic confidence indices rose to multi-year highs.

Japanese hedge funds also posted healthy returns, gaining 0.85% and outperforming the the Nikkei 225 which was down 0.88% during the month. The funds were also ahead of their counterparts in the year-to-date returns measure, with gains of 22.68%. North American hedge funds were up 1.36%, as most managers traded with confidence throughout the month.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.