Hedge Funds
Hedge funds lose 1.4% in October as HFR dispersion widens to 20.9 points
About 60% of funds fell, with technology and growth equity hardest hit while activists and sovereign bond relative-value gained.
HedgeWeekly Hedge Fund Desk ·
The HFRI Fund Weighted Composite Index fell an estimated 1.4% in October, according to preliminary figures from Hedge Fund Research published on 9 November. Roughly 60% of funds lost money over the month.
Equity hedge strategies dropped 2.4%, with fundamental growth down 5.6% and technology down 4.8%. Macro fell 1.0%, as discretionary thematic managers lost 3.2% and commodity funds 1.9%, while systematic diversified and CTA strategies slipped 0.1%. Event-driven finished 0.2% lower: activist funds rose 3.6%, but credit arbitrage lost 2.7% and distressed 1.8%.
Relative value was the lone positive major group at 0.2%, led by sovereign fixed income at 5.3%, yield alternatives at 4.6% and asset-backed fixed income at 2.1%. Dispersion was stark: the top decile of funds averaged a 7.7% gain and the bottom decile a 13.2% loss, a 20.9-point spread against 14.6 points in September.
Why it matters: a spread that wide means manager selection, not strategy label, drove October outcomes, a point allocators will weigh when reviewing technology-heavy and growth-tilted books. HFR president Kenneth Heinz said policy shifts after the midterm elections could prolong volatility, naming AI regulation, data centres, tariffs, interest rates and the Iran conflict as positioning drivers.