The Hennessee Hedge Fund Index declined by 6.24% in September, the worst month for the industry since August 1998, and is now down by 10.28% over the first nine months of this year, according to Hennessee Group.

“Despite being defensively positioned, September was the worst month for hedge funds in over a decade,” said the firm's co-founder Charles Gradante. “The ban on short selling caused significant losses across most strategies and required funds to alter their trading models.”

”Hedge funds have outperformed on a relative basis this year to date,” said managing principal Lee Hennessee. “However, given their reduced exposures over the first nine months of the year, I would expect hedge funds to be down less.”