The month associated with Halloween and also often a turbulent one in markets played to form: markets slid and hedge funds could not avoid the losses, figures show.

A benchmark of hedge fund returns showed that the sector had a weak October as equity markets tumbled. The Preqin All-Strategies Hedge Fund benchmark lost 2.35 per cent in October, the weakest result since January 2016.

Equity strategies funds were particularly affected, falling by 3.13 per cent for the month. Macro strategies funds were the only approach to make gains, returning 0.21 per cent. It takes overall performance in 2018 year to date into negative territory at -0.78 per cent, with two months of the year remaining, according to Preqin, the research firm. 

Investors have pulled money from hedge funds in the second and third quarter of this year, totalling $1.2 billion and $4.6 billion respectively. Macro strategies have been particularly affected, seeing their third consecutive quarter of net outflows totalling $9.0 billion. Relative value and credit funds also saw net outflows, as did funds based outside North America and Europe. 

“October was certainly a volatile month for equity markets globally. Hedge fund performance was severely impacted by the sell-off resulting from the escalation of trade, political and monetary policy uncertainties. With a loss of over 2% in October taking the overall return of hedge funds into negative waters, the question now is whether or not the broader hedge fund sector can finish 2018 with gains,” Amy Bensted, head of hedge funds at Preqin, said.