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Hedge Funds

HFR: Hedge funds see strong returns in first nine months of year

Aggregate performance of the $3.1 trillion global hedge fund industry was positive in the first nine months of 2017, data from index provider Hedge Fund Research showed.

The HFRI Fund Weighted Composite index returned 5.7% for the nine months ended Sept. 30, up from 4.15% in the first nine months of 2016.

On a quarterly basis, the HFRI Fund Weighted Composite index returned 2.06% in the third quarter, 1.03% in the second quarter and 2.51% in the first quarter.

The 0.46% return of the fund-weighted composite index in the month of September represented the 11th consecutive month of positive performance, said HFR researchers in the firm's third-quarter hedge fund index performance report.

The HFRI Asset Weighted Composite index returned 4.34% year-to-date through Sept. 30, up from 0.64% in the first nine months of 2016.

Quarterly returns in 2017 of the asset-weighted composite index were 1.64% for the third quarter, 0.65% for the second quarter and 2% in the first quarter.

Broad hedge fund category returns year-to date through Sept. 30 were led by the 9.63% return of the HFRI Equity Hedge (Total) index, followed by the HFRI Event-Driven (Total) index, 5.85%; HFRI Relative Value (Total) index, 4.1%; and the HFRI Macro (Total) index, -0.53%.

The HFRI Fund of Funds Composite index returned 5.52% in the nine months ended Sept. 30, up from a decline of 0.25% in the nine months ended Sept. 30, 2016.

Quarterly returns of the hedge funds-of-funds index were 2.24% in the third quarter, 0.8% in the second quarter and 2.38% in the first quarter.

"Hedge fund gains have continued throughout the year though the drivers of performance often have shifted from month to month," said Kenneth J. Heinz, HFR's president, in a news release accompanying the firm's performance report.

"While expectations for successful tax reform legislation have contributed to recent optimism, many managers are positioning for a continuum of scenarios related to this, which is likely to drive strong industry performance and growth into 2018," Mr. Heinz added.