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Global hedge funds advance in October amid stocks rally

Traders work on the floor of the NYSE in New York

NEW YORK (Reuters) - Global hedge funds posted a 2% gain in October, helped by a rally in stock markets and a combination of higher inflation and interest rates, data provider HFR said in a statement on Monday.

Equities, event-driven and macro hedge fund indexes went up last month, according to HFR, adding two-thirds of all hedge funds posted gains.

Only macro hedge funds, however, delivered positive returns to investors in the first 10 months of 2022.

"Macro strategies extended strong year-to-date performance as equities reversed intra-month declines, while the U.S. Federal Reserve prepared to raise interest rates to slow generational inflation, with performance led by multi-strategy and commodity-focused exposures," said HFR.

In October, macro funds rose 0.95%, raising their gains in the year to 11.51%.

Event-driven hedge funds soared 3.7% in October, the highest return among all categories. HFR said distressed assets, activist and special situations exposures drove performance. Still, they are down 4.31% for the year.

Equities hedge funds jumped 2.93%, posting their first gain since August and their highest monthly return this year. In the year they are still negative by 11.28%.

"Hedge funds advanced to begin 4Q, as funds opportunistically navigated both political uncertainties, as well as inflation and interest rate driven volatility, with gains distributed across the universe of both directional and uncorrelated strategies," said Kenneth J. Heinz, president of HFR.

(Reporting by Carolina Mandl, in New York; Editing by Lincoln Feast.)