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Barclay Hedge Fund Index Slips 0.11% in October; Intra-Month Volatility Extracts Its Toll

FAIRFIELD, Iowa, November 19, 2014 — Hedge funds lost 0.11% in October, according to the Barclay Hedge Fund Index compiled by BarclayHedge. After ten months in 2014 the Index is up 2.87%.

“Continued easing by the ECB and the BOJ as the Federal Reserve wound down its bond purchases, the unraveling of crowded trades in Abbvie/Shire and Fannie/Freddie and S&P 500 earnings exceeding expectations propelled risk asset prices sharply lower in the first half of the month, only to recoup those losses by month’s end," says Sol Waksman, founder and president of BarclayHedge.

“At mid-month the S&P 500 was down by 5.6 percent, but managed to sharply reverse course and end the month up 2.3 percent. Yields on US 10-year Treasuries fell to their lowest level since May 2013, only to see yields rise from 1.86 percent at mid-month to 2.33 percent by the end of October."

Overall, 11 of Barclay’s 18 hedge fund indices had losses in October. The Event Driven Index dropped 2.32%, Equity Short Bias gave up 2.14%, Distressed Securities were down 1.79%, Merger Arbitrage lost 1.32%, and European Equities were down 0.92%.

On the positive side, the Healthcare & Biotechnology Index had a 3.42% gain in October, Technology was up 1.43%, and Equity Long Bias added 0.62%.

Year to date, the Healthcare & Biotechnology Index is the leading hedge fund strategy, with an overall 16.11% gain. Healthcare & Biotechnology is enjoying strong performance in 2014, including one-month gains of 5.84%, 4.96%, 4.15%, and 3.99%.

Fixed Income Arbitrage is up 5.48% year to date, while the Multi Strategy Index has gained 3.45%. The only hedge fund strategy with a significant loss in 2014 is Equity Short Bias, which is down 12.85% for the year.

The Barclay Fund of Funds Index lost 0.71% in October, but has a 1.40% gain in 2014.

Click here to view five years of Barclay Hedge Fund Index data or download 17 years of monthly data.

Sol Waksman is an experienced media source, providing perspectives on hedge fund and managed futures trends. For more commentary or background, call 641-472-3456 or email swaksman@barclayhedge.com.

BarclayHedge was founded in 1985 and actively tracks more than 6,200 hedge funds, funds of hedge funds, and managed futures programs. Each month Barclay provides updated performance rankings for 38 Hedge Fund categories, 16 CTA categories, and 7 UCITS categories.

Institutional investors, brokerage firms, and private banks worldwide utilize BarclayHedge indices as performance benchmarks for the hedge fund and managed futures industries.