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In October, global financial markets advanced as AI partnerships and infrastructure investments continued to dominate corporate special situations, while both interest rates and geopolitical risk declined amid a Federal Reserve rate cut and an improving fourth-quarter economic outlook. Global equities posted gains on the back of strong corporate earnings, once again led by the Technology sector, with additional contributions from other sectors including Financials. Interest rates declined following the Fed’s policy move, though the U.S. dollar strengthened against most major currencies. Natural gas surged to lead commodity gains along with aluminum and soybeans, while oil prices fell.

Hedge funds gained in October with the HFRX Market Directional Index gaining +2.23% and the HFRX Global Hedge Fund Index gaining +0.68%.

HFRX Macro/CTA gained +1.38% in October from gains in systematic trend following managers. The HFRX Macro/Systematic CTA Index gained +1.73% as the U.S. dollar gained against most currencies. Commodities had a mixed performance, with gains led by natural gas, aluminum, soybeans, and coffee.

HFRX Equity Hedge Index gained +0.68% for the month from gains in fundamental growth & market neutral strategies partially offset by declines in Fundamental Value strategies. The HFRX Fundamental Growth Index gained +2.67% from gains concentrated in small-cap US and European equities. The HFRX Equity Market Neutral Index gained +0.64% from gains in mean reverting, factor-based strategies. The HFRX Fundamental Value Index declined -0.38% from declines in exposure to large-cap US and European equities.

HFRX Relative Value Index gained +0.58% in October from gains in convertible arbitrage strategies and multi-strategy managers. The HFRX Fixed Income Convertible Arbitrage Index gained +1.72% as volatility increased in October. The HFRX RV: Multi-Strategy Index gained +0.47% as interest rates declined in October following the Fed’s policy move.

HFRX Event Driven Index gained +0.41% for the month from gains in merger arbitrage strategies and special situations managers. The HFRX Merger Arbitrage Index gained +0.54% as global equity markets saw increased volatility and equity market gains through October. The HFRX Special Situations Index gained +0.40% from gains in exposure to global, catalyst-driven fundamental value equities.

Comments reference performance figures as of October 31, 2025