Hedge Funds October Performance
Hedge Funds Fell in October as Earnings DisappointedHedge funds took it on the chin in October, according to recent data compiled by Bloomberg. Hedge funds reportedly lost 1.9% on average last month as weak earnings reports appeared to betray an even weaker economy. Corporate earnings had been bright spot in the economy and the reversal appears to have spooked the market leading many hedge funds, especially global macro, multi-strategy and long-short managers, to suffer losses.
“There were plenty of headwinds out there -- the S&P was down, that weighed on equities in total and most of the long- short equity players,” said Charles Mires, director of fixed income and alternative strategies at Franklin Street Partners Inc., the $2 billion Chapel Hill, North Carolina-based wealth manager and fund of funds.
Managers including billionaire John Paulson posted losses as global stocks declined after companies including Microsoft Corp. and General Electric Co. missed earnings estimates. Paulson is seeking to rebound from record losses in 2011.
The MSCI All-Country World Index (MXWD) lost 0.6 percent last month, including reinvested dividends, and the Standard & Poor’s 500 Index dropped 1.8 percent.
The October results reduced hedge funds’ gains this year to 1.1 percent, compared with an advance of 13 percent for equities worldwide, including dividends. The index tracking performance in the $2.19 trillion industry is down 11 percent from its July 2007 peak. Source