The HFM Global Index gained 0.4% in Q3, despite the S&P 500 posting its worst month since the start of the pandemic.
The equity market falls in September and ongoing macroeconomic challenges saw equity and macro hedge funds finish the quarter in negative territory (-0.6% and -0.9%, respectively). Relative value/arbitrage funds led industry gains, up 1.8%, more than double the second-best performing top-level strategy (managed futures).
However, long/short equity strategies face an uncertain end to the year off the back of September’s selloff. Managers have struggled to find quality shorting opportunities despite turmoil in the energy markets and the write-down of tech stocks. Stable, relatively low gas prices are pivotal for the functioning of the US economy, and the return of inflation, however allegedly transitory, will give allocators more reason to trust the performance of resilient, experienced managers.
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