October was the best month of the year so far for Alternative UCITS funds. The LuxHedge Global Alternative UCITS index advanced with +0.68%, bringing YTD gains to 2.29%. The total universe currently contains over 1400 funds, more than 75% post positive returns year-to-date. In line with previous months and years, investors keep increasing their allocations to Alternative UCITS funds. Assets Under Management for the total universe went up with 1.8% in October, now standing at 451 B euros.

Performance gains were spread across most strategies. In line with the broader hedge fund market, CTA & Managed futures funds outperformed. Nearly all of the 100+ CTA funds in our universe posted positive returns last month and the LuxHedge CTA & Managed Futures UCITS index increased with +3.07%, still not recuperating all earlier losses: -0.44% YTD. After a solid month of September, discretionary Global Macro funds continued showing strong returns in October: LuxHedge Global Macro UCITS Index +0.87%.

Also Equity Hedge Funds continued on their upward path with the LuxHedge Equity Hedge & Event Driven UCITS index advancing +0.56% in October (4.80% YTD). All equity long/short indices posted positive returns with AP focused funds continuing to outperform all others. The LuxHedge Equity Long/Short Asia Pacific (incl. Japan) index increased with +2.43% in October which brings YTD gains to +23.14%. Because many long/short funds keep a long bias, part of this performance reflects rising equity markets. Still many funds in this space are generating significant additional alpha on long and short side and do offer decorrelated returns (with reference to this recent article on how to select outperforming funds).

The relatively large group of Fixed Income Relative Value funds continued to show moderate performance on average with the LuxHedge Fixed Income Arbitrage UCITS index showing a modest gain of +0.19% (YTD +1.80%). Largely 80% of funds in this category are in positive territory for the year.