October was another harsh month for key asset classes, as global equities (MSCI World Index) and commodities (Reuters CRB Index) lost 19.1% and 18.3% respectively, amid record volatility during the month. Hedge funds, however, outperformed significantly, with the composite Eurekahedge Hedge Fund Index down only 3.9%1 on the month. Losses in dollar terms were even lower at just 2.7% or US$47.2 billion for October, suggesting that larger-sized funds outperformed their smaller-sized counterparts. These losses, coupled with a net redemption of US$62.7 billion, amid heightened risk aversion and uncertainty among investors, shrank the size of the industry by US$110 billion, bringing hedge fund assets to US$1.65 trillion as at month-end. The monthly performance-based changes, asset flows and AuM for 2008 YTD, were as follows:
