In the inaugural Eurekahedge Report, the Eurekahedge Hedge Fund Index lost 4.6%1 in September, bringing average returns for the first nine months of 2008 to -7.7%, as hedge funds were able to stem drawdowns in a month that saw the S&P500 make its biggest single-day fall since 1987 (eventually finishing September down 9.1%), crude oil prices go into double-digit declines and the Dow Jones-AIG Commodity Index shed 11.6% on the month.
The months market movements came amid historic trigger events in the global financial markets, as the bankruptcy, taking over or bailing out of major, centuries-old institutions in the US and Europe brought the year-long subprime-triggered turmoil in the markets to a boil. Markets were further roiled by uncertainty over the US Treasurys proposed $700 billion bailout Bill and the Congressional debates surrounding it. In the wake of these market movements, regulators in the US and UK initiated (and later extended) unprecedented bans on short-selling of a wide basket of financial company stocks, with clauses on disclosure of existing short positions. These were quickly followed by similar bans in equity markets in Australia and Taiwan.
For a full market breakdown, click for the graphic here.