Hedgies beat shares but still lose money

HEDGE funds outperformed equities in September, according to data released yesterday, although most managers still lost money.

All strategies managed to post better returns than the S&P 500, which plunged by 7.03 per cent last month, the EDHEC-Risk institute said.

However, on average, managers pursuing a short-selling strategy were the only ones to post positive returns, with a gain of 8.14 per cent.

Commodity trading adviser (CTA) funds, which try to play the technical factors in different niche markets, posted virtually flat returns of 0.26 per cent, as did merger arbitrage funds, down 0.96 per cent.

The worst performing fund managers were those pursuing emerging markets strategies, with an average loss of 6.71 per cent.

“Relatively spared until last month, emerging markets also took a blow as their stumble of last month turned into free fall in September,” said EDHEC.