The hedge fund industry returned to monthly gains in December, returning 1.26 per cent for the month, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions.
The hedge fund industry returned to monthly gains in December, returning 1.26 per cent for the month, 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 4.48 per cent in December. For the year, the hedge fund industry posted a 10.32 per cent cumulative return for 2021.
“In four of the last five years, the hedge fund industry has delivered a return between 10 per cent and 11 per cent, making 2021’s 10.32 per cent return a solid result,” says Ben Crawford, Head of Research at BarclayHedge. “As a point of comparison, the S&P500 Total Return Index delivered investors a 28.72 per cent return on the year. On the other hand, hedge funds generally were around 64 per cent less volatile in 2021 than broad equity markets. Therefore, on a risk-adjusted basis, the average hedge fund actually outperformed the S&P500 Total Return Index, if only by a narrow margin.”
More than two-thirds of the hedge fund sub-sectors (23/30) posted gains in December. The European Equities Index took top honors for the month with a 4.86 per cent return. It was joined on the podium by the Emerging Markets MENA Index, up 4.25 per cent, and the Equity Long/Short Index which gained 3.31 per cent.
Other notable December gainers included the Option Strategies Index, returning 3.28 per cent, the Emerging Markets Sub Saharan Africa Index, advancing 3.05 per cent, the Equity Long Bias Index, up 2.53 per cent, and the Emerging Markets Latin American Equities Index, gaining 2.27 per cent.
Sub-sectors losing ground in December included the Technology Index, down -1.69 per cent, the Emerging Markets Eastern Europe Index, off -0.66 per cent, the Fund of Funds Index, retreating -0.55 per cent, the Emerging Markets Global Equities Index, down -0.31 per cent, and the Merger Arbitrage Index, losing -0.26 per cent.
All but three hedge fund sub-sectors were in the black for 2021. The Emerging Markets Eastern European Equities Index finished the year on top with a cumulative return of 19.86 per cent, followed closely by the Distressed Securities Index, up 19.01 per cent, and the Equity Long Bias Index which gained 17.52 per cent.
Other 2021 performers of note included the Emerging Markets Sub Saharan Africa Index +15.58 per cent, the Emerging Markets MENA Index +15.46 per cent, the Emerging Markets Easter European Equities Index +13.76 per cent and the European Equities Index which logged a +13.03 per cent cumulative result.
The sub-sectors which ended the year in the red included the Emerging Markets Latin American Equities Index, down -13.16 per cent, the Emerging Markets Latin America Index, off -7.27 per cent, and the Healthcare & Biotechnology Index, losing -2.29 per cent.
