Hedge funds outpacing large-caps this year

Hedge fund performance in September was its strongest since May 2009 — but still fell short of the broad stock market indexes, according to a preliminary report by Hennessee Group LLC. The Hennessee Hedge Fund Index gained 3.5% in September for a nine-month return of 4.7%, while the S&P 500 gained 8.8% in September and was up 2.3% over the first nine months of the year. The Barclays Aggregate Bond Index gained 0.1% in September and was up 7.9% through the first nine months of the year. Hennessee is scheduled to release a full report on September hedge fund performance Oct. 11. The key to the performance data, according to Hennessee co-founder Charles Gradante, is that hedge funds continue to outperform stocks on a year-to-date basis. “While managers are concerned about elevated macroeconomic risks, we are beginning to see growing optimism about the equity markets in the short term,” he said. “The Federal Reserve is determined to create growth and inflation, benefiting equities, which look attractive relative to other asset classes.”