Ivesting.com -- Hedge fund assets reached a record high in October, reaching $4.5 trillion, driven by robust performance across several strategies, according to analysts at Wells Fargo (NYSE:WFC).
This milestone was boosted by a 7.4% year-to-date return recorded in the HFRI Fund Weighted Composite Index, with Equity Hedge strategies emerging as the top performers.
Equity hedge funds posted a 9.6% gain, attributed to effective stock selection and increased exposure to public markets. Higher stock price dispersion, a consequence of elevated interest rates and slowing economic activity, created an environment conducive to active management.
Meanwhile, event driven strategies, particularly distressed credit, also delivered strong returns as companies navigated recapitalizations and restructurings.
Similarly, long/short credit strategies under the relative value category capitalized on asset pricing dislocations to generate consistent gains with low market correlation.
In contrast, Macro strategies, especially systematic approaches, faced challenges due to frequent reversals in market trends across multiple asset classes.
Analysts anticipate that certain strategies, such as equity hedge – directional, event driven – distressed credit, and relative value – long/short credit, will continue to benefit from broader economic and market recoveries.