Major Index Shows Hedge Funds Up 11% Last Year

Jan 11 2011 | 11:57am ET

Hedge funds advanced more than 11% last year, according to one widely-followed industry benchmark.

The Dow Jones Credit Suisse Hedge Fund Index added an estimated 3.01% last month to end 2010 up 11.07%. All but two of 13 strategies and substrategies tracked by the index ended the year in positive ground, seven of those in double digits. But none matched the return of the Standard & Poor’s 500 Index, which rose more than 15% last year.

Event-driven multi-strategy funds did best in 2010, rising an estimated 14.9% (5.27% in Dec.). Global macro funds, event-driven funds and fixed-income arbitrage funds also did better than their peers, rising 13.54% (2.75% in Dec.), 12.98% (4.16% in Dec.) and 12.5% (0.63% in Dec.), respectively.

Managed futures funds were up 12.28% (5.5% in Dec.), emerging markets funds 11.56% (1.71% in Dec.), convertible arbitrage funds 10.95% (1.14% in Dec.), distressed funds 9.84% (2.34% in Dec.), multi-strategy funds 9.38% (1.79% in Dec.), long/short equity funds 9.26% (3.41% in Dec.) and risk arbitrage funds 3.26% (1.24% in Dec.).

Two strategies lost ground last year. Equity market neutral funds edged down 0.37% despite a 2.22% December rally. Dedicated short-bias funds plummeted 22.52% (down 5.94% in Dec.).

Credit Suisse and Dow Jones Indexes said the estimated results were based on 88% of index constituents reporting.


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Editor's Note