A $3.2 billion Goldman Sachs Group Inc. hedge fund that pools some of the firm’s best ideas declined 5.6 percent last month as a bet on the direction of U.S. interest rates went wrong, two people with knowledge of the matter said.

Goldman Sachs Global Opportunities Fund, which invests based on the trade ideas from the money-management unit’s fixed- income team, took a position that interest rates would rise, only to see them decline, said the people, who asked not to be identified because the information is private.

Some hedge fund managers were blindsided in the first two weeks of the month as stock and credit markets sold off and interest rates dropped because of concerns that global growth was slowing. Hedge funds declined by 0.3 percent during October, according to data compiled by Bloomberg, as markets rebounded and volatility waned in the second half of the month.

“We believe monetary policy needs to catch up with growth, and that interest rates in the US and UK are likely to rise by a significant amount in the next one to two years,” according to a March paper written by the asset management arm.

Andrea Raphael, a spokeswoman for the New York-based bank, said she couldn’t comment on the fund’s performance.

Romney Investment

The fund, which has counted former presidential contender Mitt Romney among its investors, is a relative value pool that takes positions on rising and falling prices in the global fixed-income and foreign exchange markets. The fund, which was started in 2001, had $3.2 billion in assets as of June, the people said.

Since inception, the fund has generated a net internal rate of return of 9.1 percent, said one of the people. It declined 2.6 percent in 2014 through October. If that performance holds, it would lead to the second calendar-year loss in the fund’s history. The fund declined 35 percent in 2008, according to the people.

The fund is overseen by Jonathan Beinner, co-head of global fixed income at Goldman Sachs Asset Management, and Samuel Finkelstein, head of macro strategies within the fixed-income team, according to a regulatory filing this year. Goldman Sachs’s assets under supervision in alternative investments rose to about $146 billion as of Sept. 30 from $144 billion a year earlier.

Beinner also oversees a $26.1 billion mutual fund that invests in U.S. and foreign fixed income. The Goldman Sachs Strategic Income Fund has risen 0.1 percent this year, according to data compiled by Bloomberg. It’s returned 6.4 percent on average over three years, according to Bloomberg data.