The firm said that these funds, which seek to profit from broad moves in economic events – as shown by currencies, interest rates and other entities – chalked up the largest gains during a volatile October. Other strategies overall had a more challenging month.

Macro hedge funds, which try to profit from broad market swings caused by political or economic events, created standout gains during the volatile month of October amid heightened geopolitical risks and interest rate nerves, figures show.

The HFRI Macro (Asset Weighted) Index, produced by Chicago-headquartered Hedge Fund Research, rose by 0.7 per cent in October, the third consecutive month of positive performance, bringing the trailing three-month return to 4.2 per cent. 

Overall, hedge funds posted mixed performance in October, as equities traded in a wide range, interest rates continued to rise on persistent inflation concerns, and geopolitical risks spiked with the outbreak of conflict in Israel and Gaza. 

The HFRI Asset Weighted Composite Index® (FWC) – essentially unchanged for the month – declined 0.02 per cent. The HFRI Fund Weighted Composite Index, which applies equal weights to all constituent funds, declined 1.4 per cent for the month.

Fixed income-based, interest rate-sensitive strategies also posted a narrow gain for October as interest rates rose. The HFRI 500 Relative Value Index rose 0.2 per cent. Relative value arbitrage performance was led by volatility and sovereign bond exposures.

Equity hedge funds, which invest long and short across specialised sub-strategies, fell in October, with negative contributions from technology and energy exposures. The HFRI Equity Hedge Index (Asset Weighted) fell 0.7 per cent in October. 

Event-driven strategies, which often focus on out-of-favour, deep value equity exposures and speculation on M&A situations, also fell last month. The HFRI 500 Event Driven (Total) Index fell 1.6 per cent for the month.