Hedge Funds gave up 3.06% in October according to the Barclay Hedge Fund Index compiled by BarclayHedge, versus a 6.84% decrease in the S&P 500 Total Return Index. Year to date, the Barclay Hedge Fund Index is down 1.90%, while the S&P has gained 3.01%.
“Slowing growth, rising interest rates and trade wars contributed to the largest monthly decline in the S&P 500 since September 2011,” says Sol Waksman, founder and president of BarclayHedge. “US equity markets lost approximately $2 trillion in value during the month.”
Overall, 16 of Barclay’s 17 hedge fund indices had losses in October, while only one index had a gain.
In response to the selloff in tech stocks, the BarclayHedge Technology Index dropped 6.70% in October. Equity Long Bias lost 5.48%, Pacific Rim Equities gave up 3.69%, Healthcare & Biotechnology lost 3.42%, and Emerging Markets were down 3.41%.
“Nasdaq dropped 9.2 percent in October, its worst monthly decline since November 2008 when it lost 10.8 percent. The biggest names in the technology sector—Facebook, Amazon, Apple, Netflix and Google—were among the biggest losers,” says Waksman
The only Barclay Hedge Fund index with a gain in October was Fixed Income Arbitrage, which was up 0.17%.
It is not all bad news, however, for seven hedge fund indices still have positive returns for the year, although 10 now have losses.
The Healthcare & Biotechnology Index leads all indices with a 13.85% gain, Distressed Securities are up 7.13%, Technology has gained 5.60%, Fixed Income Arbitrage is up 1.95%, and the Convertible Arbitrage Index has gained 1.76%.
Year to date, the Emerging Markets Index has lost 10.68%, Pacific Rim Equities are down 5.57%, the Multi-Strategy Index has lost 2.61%, and Equity Long Bias is down 2.48%.
The Barclay Fund of Funds Index gave up 2.69% in October, and has moved into negative territory with a 2.34% loss for the year.
The data reinforces the negative tone in this investor space, which was highlighted by all of Societe Generale’s CTA indices falling into negative territory for the year following a horror October.