Hedge funds gain 1.73 per cent in December to end the year up 10.70 per cent

Hedge funds finished 2019 on a high note in December, posting an industry-wide 1.73 per cent return for the month, according to the Barclay Hedge Fund Index compiled by BarclayHedge.

For the year, the hedge fund industry gained 10.70 per cent, the largest annual return since 2013 when the Index gained 11.12 per cent. The S&P 500 Total Return Index posted a 31.49 per cent return in 2019.

All but one hedge fund index was in the black in December as a number of positive economic developments offset the impact of negative indicators.

“Equity markets finished the year strong, with US stocks enjoying their best year since 2013 when the S&P 500 Total Return Index gained 32.4 per cent,” says Sol Waksman, president of BarclayHedge. “Good news on the trade front came in the form of an apparent ‘phase one’ agreement between China and the US, as well as US House passage of a revised trade pact with Canada and Mexico. Elsewhere in the world, Japan announced plans for a fiscal stimulus while reports of increased exports from Germany raised hopes of an economic uptick there.”

Among December’s gainers, the Emerging Markets Latin American Equities Index led the way with a 13.68 per cent return. Other sectors posting solid monthly gains included the Healthcare and Biotechnology Index with a 6.10 per cent return, the Emerging Markets Global Fixed Income Index, up 5.79 per cent, the Emerging Markets Global Equities Index, gaining 3.58 per cent, and the European Equities Index, returning 3.26 per cent in December.

The lone sector in the red for December was the Volatility Trading Index, down 0.10 per cent. The Equity Market Neutral Index and the Volatility Trading Index were the only ones in negative territory for the year, dropping 0.45 per cent and 0.31 per cent respectively.

Posting the biggest one-year gains in 2019 were the Emerging Markets Latin American Equities Index, up 27.63 per cent, the Healthcare and Biotechnology Index, returning 24.94 per cent, the Technology Index, gaining 19.49 per cent, the Emerging Markets Eastern European Equities Index, returning 19.20 per cent, and the Emerging Markets Global Equities Index, up 16.72 per cent.