The global hedge fund industry saw slight performance gains in October despite the volatility of pre-US-election activity and a sharp rise in Covid 19 cases in Europe and the US, according to data from HFR.
The 0.4% gain in the HFRI Fund Weighted Composite Index will help offset declines of the previous month and keep year-to-date performance in positive territory.
Meanwhile, the investable HFRI 500 index rose by 0.3% in October led by equity-hedge and event-driven strategies.
There was a mixed performance for risk premia strategies while Ucits-regulated liquid alternatives posted modest declines.
Overall, the gains among hedge funds were inversely correlated to steep equity market declines towards the month-end – especially within the tech sector and European equities as governments reimposed more lockdowns, according to HFR data.
There was also the first quarterly net inflow since 2018 as investors allocated new capital to the hedge fund industry, increasing total industry assets under management to $3.31 trillion.
“Institutional investors continue to strategically increase allocations to hedge funds, driving capital inflows in 3Q, with these positioning not only for an uncertain geopolitical environment resulting from the US election, the indeterminate path of the coronavirus, and the corresponding economic impact, but also for the prospect of a global economic recovery into 2021,” said HFR president Kenneth Heinz.
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