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Barclay Hedge Fund Index gains 24.14 per cent in 2009

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Hedge funds rebounded from 2008 losses with a 24.14 per cent gain in 2009, according to the Barclay Hedge Fund Index compiled by BarclayHedge.

Close to 55 per cent of single manager hedge funds now have a profit for the period 1 June 2008 to 31 December 2009.

Of those funds that are still in negative territory, the average loss is currently at 17 per cent.

June 2008 marked the beginning of the financial meltdown triggered by the demise of several Bear Sterns mortgage backed hedge funds.

The Barclay Convertible Arbitrage Index led the way up in 2009 with a 53.83 per cent gain, more than making up for its 27.66 per cent loss in 2008.

The Emerging Markets Index was up 44.40 per cent at year end, after losing 39.47 per cent in 2008.

“Banks in emerging markets such as China, India and Brazil did not have large exposures to sub-prime mortgages, and therefore were able to avoid the massive write-downs forced on US and European banks,” says Sol Waksman, founder and president of BarclayHedge.

The Distressed Securities Index gained 32.78 per cent in 2009 after falling 31.70 per cent in 2008.

“As risk appetites returned, yield hungry investors drove up prices for distressed securities believing that the worst was over,” says Waksman.

The Equity Short Bias Index was the only losing hedge fund strategy in 2009, falling 19.17 per cent for the year.

“The global stock market rally in 2009 made it difficult for hedge managers who only trade the short side of the market,” says Waksman. “But let’s not forget that these same managers posted a record 40.91 percent gain in 2008.”

In December, 16 of Barclay’s 18 hedge fund indices had a positive return. The Barclay Distressed Securities Index jumped 4.57 per cent, technology was up 3.74 per cent, healthcare and biotechnology gained 3.17 per cent, equity long bias was up 3.41 per cent, and emerging markets gained 3.35 per cent.

On the losing side, the Barclay Equity Short Bias Index fell 4.78 per cent in December, and global macro was down 0.82 per cent.

The Barclay Fund of Funds Index gained 0.71 per cent in December, and is up 10.18 per cent for the year.
 

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