HFRX: Hedge Funds Up 13.4% Last Year

Jan 12 2010 | 1:30am ET

Hedge funds returned 13.4% in 2009, according to Hedge Fund Research’s HFRX Indices.

The HFRX Global Hedge Fund Index added 0.55% in December to close out the year. December’s returns were driven by distressed securities funds, which returned 3.49% on average during the month. But that wasn't enough to save the strategy from a year in the red, as distressed funds ended 2009 down 5.6%.

By contrast, last year’s standout strategies were all arbitrage: convertible at 42.46% (2.36% in December), multi-strategy relative value at 42.05% (3.46%) and relative value at 38.47% (2.82%).

Other strategies beating the overall industry average for the year were market direction at 29.34% (1.67% in December), special situations at 19.57% (1.45%), fundamental growth at 17.54% (2.66%) and event-driven at 16.59% (1.03%).

In addition to distressed securities, 2009’s losers included systematic diversified funds (down 9.04% on the year, down 3.74% in December), macro funds (down 8.78% YTD, down 2.62%), equity-market neutral funds (down 5.56% YTD, down 0.67%), absolute return funds (down 3.58% YTD, up 0.16%) and multi-regional funds (down 1% YTD, down 1.15%).

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