FoHFs fell by 0.1% on a median basis in September to conclude a muted third quarter for the industry. The fourth negative month of the year resulted in the YTD for the HFM InvestHedge Composite Index falling slightly to 0.7% to the end of September, while single-manager hedge funds, represented by the HFM Global Composite Index, were up by 2% for the year, following a 0.1% gain for the month.
The HFM InvestHedge Composite Index posted a marginal gain of 0.1% for the last quarter, after the majority of FoHF strategies posted negative median returns for September, while those strategies that remained in positive territory all delivered below 0.5%.
US equity-focused FoHFs remain the strongest performers on a YTD basis to the end of September, up 4.4%. They returned one of the strongest quarterly gains, at 1.2%, despite the HFM InvestHedge US Equity Index posting a median loss of 0.6% for the month. Three-quarters of US-equity focused funds were down in September, with losses ranging from 0.1% to 2%. The strongest performing funds in the peer group, which included Voyager Specialists, Invitational Opportunity Fund and the Prima Capital Fund, were up by more than 5% for the year.
Global equity funds were down by a similar 0.5% for the month, which reduced the year-to-date gain of the HFM InvestHedge Global Equity Index to 1.5%. There were losses across most funds in the category, but Ayaltis’s Areca Azure fund, MMIP Investment Management’s Diversified Absolute Return Fund and Edmond de Rothschild’s Prifund Alpha Volatility all posted gains.
Albatross Worldwide Equity Fund, Fischer Global Opportunity Fund and Berens Global Value Fund were among the weakest performers, each losing more than 1% for September.
The European equity peer group was among the weakest performers, as every fund suffered losses. The HFM InvestHedge European Equity Index fell by 1% in September and posted a 1.7% loss for the quarter, to extend YTD losses to 1.5%.
The HFM InvestHedge Emerging Markets Index dropped 0.4%, marking its second consecutive monthly decline and posting -2.2% for Q3.
The HFM InvestHedge Asia-Pacific Fund of Funds Index was down for the fourth consecutive month, to bring its Q3 return to -2.9%. The index fell by 1.2% in September, extending the year-to-date losses to over 5%.
Managed futures-focused FoHFs suffered the greatest loss, following a 2% rise in August that brought an end to the peer group’s three-month run of negative returns. The HFM InvestHedge Managed Futures Index was down by 1.4% in September, which raised the YTD decline for the index to 4%.
RPM Risk & Portfolio Management’s Galaxy Fund, which led the peer group in August with a 7.6% gain, was down by 2.5% in September to bring its YTD losses to 9%.
Elsewhere, the HFM InvestHedge Arbitrage Index remains one of the strongest performers for the year. The Index was up for the seventh consecutive month in September and its 0.3% gain raised the YTD to 3.2%. The commodities peer group was up in every month of Q3 and posted a 1.1% gain for the quarter, to bring the YTD to 2.2%.
FoHF of the month: Riverview Premium PartnersRiverview Premium Partners was up by 7.8% for the year through to 30 September. The fund gained 0.5% for the month and 1.8% for the third quarter, while the HFM InvestHedge Global Multi-Strategy Index was up by 0.1% for the month, 0.7% for Q3% and 2.3% YTD. The $330m fund is managed by Morgan Stanley Investment Management. Launched in January 2008, it invests in a concentrated group of underlying hedge funds run by investment managers with significant relevant experience, employing a variety of strategies. Riverview Premium Partners is managed by Mark van der Zwan. The FoHF has not had a negative year since 2008, when it dropped 22%, and the fund has been positive for the past seven consecutive months.
Data: FoHFs down in September to round off flat third quarter on HFM InvestHedge.