Convertible Arbitrage Hedge Funds Soar In ’09, Most Other Strategies Rally

Jan 11 2010 | 2:54am ET

The HFRI Fund-Weighted Composite Index added 1.25% in December , closing out the year at 20.04%. Just two strategies and substrategies—out of the 23 tracked by HFR—lost ground last year, and only three last month.

Fixed-income convertible arbitrage funds were the strongest strategy in 2009, by some distance. The strategy returned 58.43% on the year (1.67% in December). Russia and Eastern Europe funds came in second at 51.08% (1.02%), followed by Latin America funds at 47.95% (2.39%), energy and basic materials funds 40.57% (3.21%) and emerging markets funds 40.32% (1.82%).

The (short) list of losers is short-bias, which plummeted 23.47% on the year (down 4.12% last month), no surprise given the equities rally last year. Systematic diversified funds lost 2.45% last year, all of it in the final month, when it lost 3.53%. The only other strategy to suffer a down December was macro, which lost 1.63% last month to end the year up 4.03%, the third-worst positive performance of any HFRI index.

The other major hedge fund strategies all ended the year with returns in excess of 25%. Event-driven funds returned 25.96% last year (3.15% in December), relative value funds 25.8% (1.95%) and equity hedge funds 25.07% (2.37%).

The HFRI Fund of Funds Composite Index finished 2009 up 11.16% after rising 0.44% in December.

Asia ex-Japan funds returned 36.8% (1.7% in December), global emerging markets funds 35.38% (2.46%), fixed-income corporate funds 31.05% (1.75%), technology and healthcare funds 27.03% (3.41%), distressed and restructuring funds 29.19% (3.35%) and asset-backed funds 26.33% (3.68%).

Relative value multi-strategy funds added 24.69% (2.2%), yield alternatives funds 23.79% (2.05%), quantitative directional funds 16.18% (3.18%) and merger arbitrage 11.6% (1.1%). Equity market-neutral funds returned just 1.85% on the year (0.69% in December) and private issue and Regulation D funds just 0.58% after a 3.55% jump last month.


In Depth

Hedge Fund Veteran Peter Borish Talks Trading

Dec 17 2014 | 9:32am ET

Peter Borish says 2014 was “tricky” from a trading perspective. “The best...

Lifestyle

Cohen Donates $1.5M To GOP Governors Association

Dec 10 2014 | 7:13am ET

The Republican Governors Association raised close to $25 million from October 1...

Guest Contributor

Q&A With Daniel Gallancy: Institutional Interest In Bitcoin Is Growing Steadily

Dec 12 2014 | 7:54am ET

Daniel Gallancy is founder and CEO of SolidX, a provider of total return swaps for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.