In October, convertible and distressed funds post worst results on record


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