Information services provider Opalesques Emerging Managers Total Index of hedge funds and managed future funds gained 4.222% in October and is up 4.25% year to date. Since January 2009, the index has performed well, returning 34.5% in 2009 and 18.73% in 2010, adding to a cumulative return of 66.49%.
The Emanagers database includes 307 funds belonging to hedge fund management firms less than 48 months old and with assets under management of less than $600 million at the time of the firm’s inception. Hedge funds comprise 65% of the index, while managed futures funds comprise 35%.
Hedge funds profited from last month’s strong market rally, with the Emanagers Hedge Fund Index gaining 6.22%. The index is now back in positive territory (+0.33%) year to date. Managed futures strategies posted mixed results and a flat overall performance for the third month in a row. However, the Emanagers CTA Index is still up 11.90% for the year after a gain of over 13% in July.
Although emerging manager hedge funds outperformed the Eurekahedge Hedge Fund Index over the last 12 months, they were much more volatile, said Opalesque. Analysis of the beta coefficient also shows that emerging manager hedge funds had a higher market risk over the last year than their established counterparts, driven by both volatility and correlation, it added.
By contrast, Emanagers managed futures funds had a good year, returning 11.9% year to date, due to the fact that these funds investment strategies are virtually uncorrelated with the global stock market, said Opalesque.
(JDC)