Hedge fund performance dropped by -0.4% in October 2024, marking a pause after a solid stretch of positive returns that had extended from May, according to global asset servicer Citco.
Despite this slight downturn, Citco-administered hedge funds have achieved a robust overall weighted average return of 10.6% year-to-date, according to Citco’s data.
In October, global macro funds led the performance with a weighted average return of 1%, demonstrating resilience amidst broader market challenges. Fixed income arbitrage funds followed closely, yielding a 0.7% return, while equity strategies recorded a moderate gain of 0.4%.
In contrast, commodity-focused funds faced significant headwinds, ending the month with a weighted average decline of -2.5%. Multi-strategy and event-driven funds also underperformed, recording returns of -1.3% and -0.6%, respectively.
Hedge fund risk management and regulation concerns rise
The report highlighted that asset categories under administration were generally marginally negative in October, with an overall weighted average return of -0.4%. However, mid-sized funds showed relative strength, with funds managing between $200-500 million and $500 million to $1 billion reporting smaller declines of -0.2%. Notably, more than half of the funds (51%) remained in positive territory despite the challenging month.
Another finding from Citco’s report was the widening disparity in fund performance, with an 8.2% gap between returns in the 90th and 10th percentiles. Hedge funds also saw net inflows of $0.9 billion in October, with subscriptions of $11.4 billion against $10.5 billion in redemptions, indicating continued investor interest in hedge fund exposure despite October’s mixed results.
Treasury payment volumes also reached a record high, with 55,161 transactions in October, surpassing the previous peak of 52,650 set in July. Regional capital flow data revealed a positive trend for the Americas and Europe, with net inflows of $1.1 billion and $0.3 billion, respectively, while Asia experienced a slight net outflow of $0.5 billion.
