Hedge funds declined by an average of 2.34 per cent in November, according to the Barclay Hedge Fund Index compiled by Fairfield, Iowa-based BarclayHedge, bringing the index's decline since the end of the year to an unprecedented 20.63 per cent.

Overall the Barclay Hedge Fund Index has fallen 21.27 per cent in 2008 up to the end of November, although this compares with a decline of 37.66 per cent for the S&P 500. The Barclay Fund of Funds Index was down 1.64 per cent in November, and has lost 20.04 per cent over the first 11 months of the year.

'The past six months have been the worst on record for the hedge fund industry,' says BarclayHedge founder and president Sol Waksman. 'Before 2008, the longest string of consecutive losing months was three, when hedge funds lost 4.25 percent from September through November 2000 and then 3.30 percent from July through September 2001.'

Many hedge fund strategies again experienced significant losses last month. Barclay's Equity Long Bias Index dropped 4.81 per cent, the Healthcare & Biotechnology Index fell 4.50 per cent, the Emerging Markets Index was down 4.22 per cent, and the Convertible Arbitrage Index lost 3.69 per cent.

Emerging markets has been the worst performing strategy in 2008, losing 39.34 per cent for the year to date. Equity long bias is down 28.81 per cent, and convertible arbitrage has lost 28.02 per cent.

'Early in 2008, there was a great deal of discussion about how emerging markets had decoupled from developed markets,' Waksman says. 'The current economic environment has clearly demonstrated that when consumption decreases in developed nations, exporting nations also feel the pain.'

Four of Barclay's 16 hedge fund indices provided positive returns in November. The Barclay Equity Short Bias Index gained 3.51 per cent, and is up 43.76 per cent this year. Barclay's Global Macro Index rose 1.47 per cent, Pacific Rim Equities gained 0.23 per cent, and Equity Market Neutral was up 0.13 per cent.  Equity Market Neutral is now down just 0.98 per cent for the year, while Global Macro has a loss of 1.32 per cent.

BarclayHedge, formerly known as the Barclay Group, was founded in 1985 and tracks more than 6,600 hedge funds, funds of hedge funds, and managed futures programmes for its 18 proprietary hedge fund indices and eight managed futures indices, used as performance benchmarks by clients including institutional investors, brokerage firms and private banks.