Hedge funds continued to perform well in November, despite the ongoing global economic turmoil, with the Eurekahedge Hedge Fund Index up 1.4% against an encouraging market backdrop that saw the S&P 500 also up 5.4%. In the US, The Fed signalled their expectation of smaller rate hikes in December to bring inflation down to its 2% target, even if that led to temporary economic problems. Meanwhile, in the UK and Europe, sterling had a significant uptick against the dollar as the bond market further stabilized after the change of government, and German economic sentiment improved as the economy grew by 0.4% during Q3. There are positive indications that inflation may have eased across Europe, but it remains in double-digits as high food and energy prices continue to impact citizens budgets
Following the uptick in November, global hedge funds have reduced their YTD losses to 3.7%. By comparison, the S&P 500 has lost 16.7% YTD, exemplifying the relative resilience that hedge funds have displayed in navigating the market turmoil. November saw an inflection in the returns seen across strategies with positive monthly performance in long/short equity (2.9%) leading the field, bolstered by stronger global equity market performance over the month. Distressed debt recorded the second-highest return of 2.2%. Returns were positive across all regions in November with Asia seeing a significant uptick of 4.8%. North America (1.6%) and Europe (2.1%) also performed well despite the ongoing energy crisis and steep inflation.
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