On average, hedge funds lost money in October, while equity strategies were the biggest losers as stock prices fell, according to French bus...

On average, hedge funds lost money in October, while equity strategies were the biggest losers as stock prices fell, according to French business school Edhec. Long/short equity hedge funds lost 2.41 per cent on average in October, reducing their year-to-date returns to 2.13 per cent, according to the research. This compares with a losses of 1.98 per cent for the MSCI index of world stocks in October and a gain of 7.10 per cent year-to-date. "The month of October was characterised by the poor performance of global stock markets. Value and small cap stocks performed even worse than the broad stock market. Stock market volatility rose," Edhec said in a statement. The Chicago Board Options Exchange's Market Volatility Index, a benchmark measure of US stock market volatility, reached a five-month peak of 17.19 on October 13, but has since slipped to around 13. This rise in volatility has allowed of convertible bonds to make positive returns for the fifth month running. They returned 0.24 per cent in October although in the year to date they are still down by 3.10 per cent. Managed futures funds, lost 1.49 per cent in October and year-to-date are up only 0.15 per cent on average. Event-driven strategies were down 1.35 per cent but up 1.28 per cent for the first 10 months of this year according to Edhec.