Hedge fund performance rose for the third month in a row, gaining 0.11 percent in September according to flash estimates for the Barclay Hedge Fund Index.
“September returns were dominated by a rally in G7 and Asian equity markets,” says Sol Waksman, the founder and president of The Barclay Group. “Funds with the largest net long exposure in the G7 and Asian markets had the greatest likelihood of a profitable month.”
Overall, 11 of Barclay’s 18 hedge fund indexes gained value in September. The Technology Index jumped 2.65 percent, Merger Arbitrage gained 1.04 percent, and Convertible Arbitrage rose 0.77 percent.
“The flip side of the positive returns in equities are the losses sustained by the short-sellers,” says Waksman. “And, of course, we mustn’t forget the well-publicized losses in the energy sector, where prices have continued their prolonged decline.”
The largest decline was in the Equity Short Bias Index, which dropped 2.36 percent in September. The Global Macro Index fell 1.08 percent, and Equity Market Neutral lost 0.65 percent.
The trend for hedge fund returns continues upward, with 16 of Barclay’s 18 hedge fund indexes in positive territory for 2006. The Emerging Markets Index is up 10.40 percent, Merger Arbitrage is up 9.91 percent, and Healthcare and Biotechnology has gained 9.87 percent.
The Barclay Hedge Fund Index has been positive in seven out of nine months this year, and is up 6.77 percent year to date.
Only two indexes have lost ground in 2006. The Pacific Rim Equities Index is down 1.95 percent for the year, and Equity Short Bias has lost 1.14 percent.