HFR Hedge Funds Up In October

CHICAGO (HedgeWorld.com) - In an up-and-down year for hedge fund returns, October had a decidedly "up" feel to it, and a lack of red numbers populating the Hedge Fund Research Inc. indexes for the month helps explain why.

Hedge funds in HFR indexes collectively earned 1.98% last month, and are up 9.22% for the year. Leading the way last month, as they have for a good part of the year, were emerging markets funds. Asian specialists earned 3.45% in October, boosting their year-to-date return through Oct. 31 to 16.54%. Funds concentrated in Eastern Europe and the former Soviet states earned 1.31% last month, but have outpaced everyone else for the year at 23.71%.

HFR's equity hedge index was up 2.09% in October, giving it a year-to-date return of 8.2%, which trailed the broad HFR index. Equity non-hedge strategies were lifted by the broader equity markets last month, and returned 3.2%. Such funds earned 9.18% for the year through the end of October, according to HFR.
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Event-driven managers in the HFR indexes earned 1.73% in October, pushing their year-to-date return to nearly 11%. Convertible bond specialists earned 1.34% in October and can claim 10-month returns of 12.31%.

Macro managers continued to trail the field, although October wasn't a bad month. The HFRI Macro Index posted a 1.35% return for October, but its year-to-date figure stood at 4.61%.

The HFRI Merger Arbitrage Index saw a 1.66% gain in October, bringing that strategy's year-to-date performance through Oct. 31 to 11.76%. Relative value arbitrage managers tracked by HFR earned 1.35% last month and have earned 9.12% year-to-date.

Funds of funds tracked by HFR returned 1.56% last month and are up 6.4% on the year.

The lone strategy with a negative return last month - even though some, like high-yield managers, were very close to flat - was short selling. The HFRI Short Selling index fell 1.27% in October and is down 1.8% for the year, the only strategy with a negative return on the year. That short sellers got caught a little short in October was not shocking considering that the Standard & Poor's 500 total return index was up 3.26% in October and has returned 12.06% year-to-date.

(c) 2006 Daily News; White Plains. Provided by ProQuest Information and Learning. All rights Reserved.

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