The firm’s HFRI Fund Weighted Composite Index gained by 1.5 per cent for October, the 10th gain in the last 12 months, with positive contributions across all strategies led by the equity hedge and event-driven categories.

(Equity hedge is the most common strategy type in the industry. It also known as long/short equity; such funds buy stocks that are undervalued and short-sells stocks that are overvalued. Event-driven funds exploit mispricing caused by events such as mergers and takeovers. Macro funds seek to exploit broad macro-economic moves via the use of currencies, derivatives and interest rates.)

The index has gained by 7.2 per cent through October, the best year-to-date performance since 2009 when it gained by 20.0 per cent, HFR said in a statement today.

The HFRI Equity Hedge Index rose by 1.8 per cent for the month, bringing YTD performance to 11.3 per cent. Equity hedge performance is the strongest since gaining 24.6 per cent in 2009 and exceeds the annualized performance of EH since 1990.

The HFRI Event Driven Index posted a gain of 1.5 per cent, the 15th monthly gain in the trailing 17 months, and bringing YTD performance to 10 per cent. Event-driven gains were again led by activist and special situations strategies, the report said.

Macro hedge funds, meanwhile, ended a five month performance decline, with the HFRI Macro Index gaining 1.1 per cent, paring the YTD decline to -0.90 per cent.

The HFRI EH Short Bias index, in which funds are positioned to make gains when markets fall, not surprisingly lost ground as markets advanced in October; the index fell 1.95 per cent in October. Since January, the index has dropped by 15.67 per cent.