The hedge fund industry fell victim to its own September Swoon, losing -1.22% during the month, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions. September’s loss broke a streak of 10 consecutive months of hedge fund industry gains.
Equity markets fared worse on the month, with the S&P 500 Total Return Index down -4.65% in September.
For the year to date the hedge fund industry was up 8.45% through September. The S&P 500 Total Return Index was up 15.92% over the same period.
Most hedge fund sectors followed the broader trend in September, with 22 of the 30 hedge fund subsectors tracked in the Barclay Hedge Fund Indices in the red for the month. Of those subsectors posting gains in September, the Distressed Securities Index led the way returning 1.91% while the Emerging Markets Eastern Europe Index advanced 1.23%.
Other September gainers included the Emerging Markets Global Fixed Income Index, up 1.09%, the Convertible Arbitrage Index, returning 0.87%, and the Merger Arbitrage Index, gaining 0.35%.
Subsectors losing ground in September included the Emerging Markets Latin American Equities Index, off -4.00%, the Healthcare & Biotechnology Index, down -3.83%, the Balanced (Stocks & Bonds) Index, losing -2.51%, the Emerging Markets Global Equities Index, off -2.87%, and the Emerging Markets Sub Saharan Africa Index, down -2.43%.
Despite September’s downturn, nearly all hedge fund subsectors were in the black for the year to date through September. The Emerging Markets Eastern European Equities Index has been the big winner so far this year with an aggregate return of 24.40%, followed closely by the Distressed Securities Index which is up 19.58% on the year-to-date period.
Other subsectors posting noteworthy year-to-date gains included the Emerging Markets MENA Index, up 15.26%, the Equity Long Bias Index, gaining 13.95%, and the Technology Index, advancing 11.93%.
Only two subsectors posted year-to-date losses through September. The Emerging Markets Latin American Equities Index was down -6.30% for the period, while the Emerging Markets Latin America Index was off -0.98%.
“September is historically a slippery period for equity markets, and this year contributed to its lore. As a result, we saw many hedge fund subsectors sliding into the red for the month,” remarked Ben Crawford, Head of Research at BarclayHedge. “Nevertheless, the industry brought the ‘hedge’ of their namesake and outperformed the S&P 500 index, which posted its worst monthly loss since the start of the pandemic. Notably, every industry subsector remains gainful on the year with the exception of Latin American indices which have struggled throughout 2021.”
For a complete table of BarclayHedge Hedge Fund and Sub-Index results for September, as well as historical returns, click here.
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BarclayHedge, a division of Backstop, currently maintains data on more than 6,900 hedge funds, funds of funds and CTAs. The BarclayHedge Indices are utilized by institutional investors, brokerage firms and private banks worldwide as performance benchmarks for the hedge fund and managed futures industries.
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