On the heels of the worst month for hedge funds on record, October proved to be another bloodbath as the credit crisis and a deteriorating economy depressed global markets. The Absolute Return Composite Index declined 2.72% in October, the index’s second worst month ever, preliminary data show. In September, when Lehman Brothers’ bankruptcy pushed already edgy markets into freefall, the Composite lost a record 4.2%.
However bad the news, hedge funds continue to outperform the broader equity market. The S&P 500 index lost nearly 17% in October, leaving it down 34% for the year. Hedge funds have declined