A Very Bad Year: Hedge Funds Down More Than 4%

Jan 9 2012 | 2:36pm ET

Hedge funds closed out 2011 in fitting fashion, ending one of the industry's worst years ever with further losses.

The Hennessee Hedge Fund Index lost 0.6% in December, its seventh losing month of the year, to finish 2011 down 4.27%. All but seven of the 23 strategies and substrategies tracked by the Hennessee Group ended last year in the red, and only six of the 21 subindices reporting for December were up on the month—and none more than healthcare and biotechnology's 0.84%.

"It was a disappointing year for hedge funds as they underperformed broad market returns for the second year in a row," Hennessee's Charles Gradante said. "Hedge fund managers describe 2011 as 'more frustrating than 2008.'"

Short-biased funds enjoyed the strongest year, adding 3.95% (down 1.33% in December). Market neutral funds rose 3.71% (down 0.21% in Dec.) and fixed-income funds 3.6% (up 0.14% in Dec.). Healthcare and biotech added 1.9%, high-yield 1.59% (down 0.38% in Dec.), technology 1.22% (up 0.37% in Dec.) and merger arbitrage 0.18% (down 0.08% in Dec.).

On the other hand, emerging markets and Europe funds were hardest hit, losing 12.85% on the year (down 0.55% and 0.32% in Dec., respectively). Also a double-digit loser: Financial equities funds, which lost an average of 11.54% (down 2.45% in Dec.).


In Depth

Humble in Hofstra...One Debate an Election Can Make

Sep 26 2016 | 10:20am ET

Tonight's U.S. Presidential debate, infamously coined the “Humbling in Hofstra...

Lifestyle

Vortic: Reimagining the Custom Wristwatch

Sep 27 2016 | 7:24pm ET

American watch manufacturer Vortic, which started out restoring antique pocket watch...

Guest Contributor

Malik: The Ever-Changing Middle Market and The Entering Class of 2016

Sep 2 2016 | 5:01pm ET

Deal sourcing and origination is only going to get more competitive given current...