PivotalPath has released their monthly report, the Pivotal Point Of View, which measures performance among more than 2,500 institutionally-relevant hedge funds and spanning $3T of industry assets.
Key Takeaways:
- Hedge Fund performance was largely flat in October, despite a small loss in the S&P 500 – the PivotalPath Hedge Fund Composite Index rose 0.1% during a time when the S&P declined 0.91%; the global MSCI World was down -1.98%.
- YTD the PivotalPath Equity Sector Index remains the strongest of our main hedge fund indices, it is now up 14.6% for the year and 26.4% over the last 12 months.
- Conversely, the PivotalPath Managed Futures index recorded a -2.3% drop with most funds hurt by being long bonds and short the USD.
- Most managers retain a strong belief in the US equity market’s positive fundamentals but were buffeted at the end of the month by a mixed earnings season, especially a run of uneven results from big tech that continues to chip away at the AI-growth thesis.
- For the 12-month rolling period through 2024, Credit and Multi-Strat funds continue to produce the highest alpha relative to the S&P 500.
2024 Hedge Fund Performance
Strategy Highlights: PivotalPath main indices experience a mixed October
- After a challenging October PivotalPath’s main Indices experienced an uneven month, as we plunged into Q4.
- While the equity space prospered, the PivotalPath Managed Futures Index labored over the course of the month, with most funds hurt by being long bonds and short the USD. The index recorded a -2.3% drop, all but wiping out the gains of 2024, with a YTD of 0.8%.
- The PivotalPath Composite Index has generated 6.4% of alpha relative to the S&P over the 12-month rolling period to the end of October, v. 4.3% in the same rolling period to the end of 2024’s previous three quarters.
Pivotal Context
The Backdrop: Managers navigated nervous global market conditions across October
- October saw the final weeks of a landmark US election campaign, a hectic mega-cap results season and whispers of bond vigilantes stalking US Treasuries.
- This series of “big events” events created unease, with the S&P 500’s recent uninterrupted growth coming to a halt, as its stocks fell for the first time in 5 months by 0.91%. A downward trend also repeated across the Nasdaq (0.52%), Dow Jones Industrial Average (1.34%) and Russell 2000 (1.49%).
- Most managers retain a strong belief in the US equity market’s positive fundamentals but were buffeted at the end of the month by a mixed earnings season, especially a run of uneven results from big tech that continues to chip away at the AI-growth thesis.
- The Fed’s larger than expected 50bps rate cut in September now seems like a distant memory. And although another 25bps cut has been priced in before the end of the year, Treasury yields continue to stay high as managers anticipate a bumpy post-election period and fret over inconclusive economic data, including recent underwhelming US economic growth prints and slowing job numbers.
- In the US there is a very real fear that with increased Government borrowing being the (only) tie that bound cross-party policies in the run up to the 5 November, there could still be a post-election selloff of Treasuries, pushing yields higher and causing a delayed shock in the US equity markets.
- This series of “big events” events created unease, with the S&P 500’s recent uninterrupted growth coming to a halt, as its stocks fell for the first time in 5 months by 0.91%. A downward trend also repeated across the Nasdaq (0.52%), Dow Jones Industrial Average (1.34%) and Russell 2000 (1.49%).
Read the full report here by PivotalPath
