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

An Interview With Harvest Volatility Management's Rick Selvala

Mar 23 2017 | 5:39pm ET

Several years of extremely low interest rates have pushed some investors into equities...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

SEI: Private Debt Coming Into Its Own

Mar 8 2017 | 9:24pm ET

The explosive growth of private debt over the past few years has caused the lines...

 

From the current issue of