Inflation Up, Hedge Funds Down in October

FAIRFIELD, Iowa, November 9, 2005 - Hedge fund managers faced difficult market conditions in October, losing 1.35 percent according to The Barclay Group.

"Inflation figures released in October heightened market concerns that the Fed would continue to raise interest rates," says Sol Waksman, founder and president of The Barclay Group.

"As rates increased, stocks dropped and credit spreads widened. In that environment, many hedge fund sectors were unable to post gains."

Just four of Barclay's 18 hedge fund indices were up in October. The Barclay/GHS Hedge Fund Index dropped 1.35 percent, but is still up 6.37 percent for the year.

"The Fund of Funds Index lost 1.42 percent last month and has gained just 3.48 percent in 2005, roughly half the return of the hedge fund industry as a whole," says Waksman.

Equity Short Bias gained 2.55 percent in October and is up 12.20 percent in 2005. Only two other sectors have double-digit returns for 2005, Emerging Markets and Pacific Rim Equities.

Click here to view nine years of Barclay/GHS Hedge Fund Index data.

The Barclay Group, founded in 1985, actively tracks more than 4,900 hedge funds and managed futures programs. Barclay's indices are utilized worldwide as performance benchmarks for the hedge fund and managed futures industries.

For more commentary, call Sol Waksman at 641-472-3456 or email sol@barclayhedge.com.