Hedge funds are kicking into a higher gear.
They gained 4.9% on average in the first three quarters of 2019, the best performance in this span since 2013, according to a report Monday from Hedge Fund Research. Equity strategies are leading the gains, followed by event-driven on an asset-weighted basis.
Managers have improved their performance during a year that Brexit woes, a U.S. trade war with China and an impeachment inquiry of President Donald Trump have roiled markets. At this time last year, hedge funds on average had gained 1.7%. Hedge funds mostly weathered September’s momentum-factor reversal, eking out a tiny gain for the month and third quarter.
Still, the industry’s performance trails the S&P 500 index, which has rallied about 21% through Sept. 30 this year with dividends reinvested.
As the global economy slows, the fourth quarter could pose challenges for managers. Last year, hedge funds took a beating in the final quarter as the stock market tanked the most in about eight years.