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Hedge Funds

Hedge funds eke out positive return for year so far, HFRI reports

Hedge fund industry performance was up nearly 1.5% three-quarters of the way through the year, data from Hedge Fund Research Inc. showed.

The HFRI Fund Weighted Composite index returned 1.45% in the nine months ended Sept. 30, while the HFRI Asset Weighted Composite index was up 1.68%.

By contrast, the fund-weighted composite index returned 5.7% for the nine months ended Sept. 30, 2017, while performance of the asset-weighted composite index was 4.34%, HFR data showed.

For the quarter ended Sept. 30, the HFRI Fund Weighted Composite index was up 0.63% while the HFR Asset Weighted Composite index was up 0.33%.

The fund-weighted index returned 0.86% in the previous quarter, while the asset-weighted composite index returned 0.75%, according to HFR's quarterly hedge fund performance report.

A year earlier, the HFRI fund-weighted composite index returned 2.22% for the third quarter of 2017 and the asset-weighted composite index was up 1.73%.

The best-performing of HFR's broad hedge fund strategy indexes in the first nine months of 2018 were:

  • HFRI Relative-Value (Total) index, which returned 3.19%;
  • HFRI Event-Driven (Total) index, 2.34%;
  • Equity Hedge (Total) index, 1.82%.

The HFRI Macro (Total) index was down 1.82% over the time span.

The HFRI Fund of Funds Composite index was up 1.16% in the nine months ended Sept. 30, with a return of 0.44% in the third quarter, 0.44% in the second quarter and 2.31% in the three-month period ended Sept. 30, 2017.

"Financial market risk increased across a wide continuum in September, including rising U.S. interest rates associated with accelerating economic growth, rising Italian bond yields and (European Union) budget uncertainty, regulatory risk and record valuations in U.S. technology equities, and ongoing political uncertainty over both trade and social policies," HFR President Kenneth J. Heinz said in the report.

He added that "each of these risks, which have accelerated into October, has contributed to the increased risk of contagion and increased prospect for near-term volatility or major dislocations across asset markets (that may create) fluid expectations for opportunities created by such dynamic developments. These trends are likely to continue to drive industry performance through the fourth quarter and into 2019."