PivotalPath has released their monthly report, the Pivotal Point Of View, which measures performance among more than 2,500 institutionally-relevant hedge funds, as well as 40+ different hedge fund strategies and $2.5T in total industry assets.
The big takeaway for September? High levels of dispersion are creating massive differences in manager performance. Managers in the top 75th percentile outperformed those in the bottom 25th by 23% – roughly double the 10-year average.
Q3 2022 hedge fund letters, conferences and more
Highlights
- The Composite’s (cumulative) spread above the S&P 500 is now ~24% YTD, the largest 9-month outperformance since the 9-month period ending in June 2009.
- Dispersion is the highest it’s been since the 2008-2009 Financial Crisis. The PivotalPath Composite Index dispersion between the 75th percentile and the 25th percentile through September is 23% compared to a ten-year annual average of 12.3%.
- In a reversal, many larger funds (especially within managed futures) have outperformed smaller ones in 2022. This is because large funds typically need to deploy more capital to medium/long-term trend following, which has captured the 2022 environment. These funds have done well due to these restrictions from their large capital base—while smaller funds, which often benefit from nimbleness, have been less successful.
