The hedge fund industry posted a second consecutive positive month in December, returning 3.29 per cent according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions. By comparison, the S&P 500 Total Return Index was up 3.84 per cent in December.For the year, the hedge fund industry gained 10.95 per cent in 2020, its third double-digit annual return in the past four years. The S&P 500 Total Return Index was up 18.40 per cent over the 12 months.
Thirty of the 31 sectors tracked by the Barclay Hedge Fund Indices posted gains in December, the outlier being the Emerging Markets MENA Index which was down 0.98 per cent.
“While some indicators pointed to a slowing economy as COVID-19 cases surged, stock markets responded well to new economic stimulus developments,” says Sol Waksman, president of BarclayHedge. “Meanwhile, vaccine approvals and initial distribution offered hope to Investors for a return to normal. The S&P 500 Total Return Index finished 2020 at record highs.”
Leading the way among December’s gainers was the Emerging Markets Asian Equities Index, returning 6.59 per cent for the month. The Emerging Markets Global Equities Index was up 6.34 per cent, the Emerging Markets Latin American Equities Index returned 5.41 per cent, the Healthcare & Biotechnology Index advanced 5.33 per cent, and the Emerging Markets Eastern Europe Index gained 5.10 per cent.
In a year in which the pandemic prompted an even greater reliance on technology and focus on health care, the Technology Index set the pace for 2020, gaining 34.10 per cent over the 12 months, followed by the Healthcare & Biotechnology Index which was up 27.51 per cent.
Other leading sectors over the 12-month period included the Emerging Markets Asian Equities Index, up 25.76 per cent, the Emerging Markets Global Fixed Income Index, returning 23.30 per cent, and the Equity Long Bias Index, gaining 16.16 per cent.
Sectors in the red for 2020 included the Emerging Markets Latin America Index, down 6.45 per cent, the Emerging Markets MENA Index, off 4.14 per cent, and the Equity Market Neutral Index, giving up 1.23 per cent.
Twenty-seven sectors posted annual gains. Only four sectors posted losses.
