Wednesday, 22 October 2014
Last updated 15 hours ago
Jan 10 2012 | 8:03am ET
Hedge funds ended 2011 down 4.16%—the second worst yearly return on record—according to the Eurekahedge Hedge Fund Index, having wound up a difficult year by shedding 0.21% in December
That said, hedge funds—particularly the big ones—managed to outperform underlying markets. The capital-weighted Mizuho-Eurekahedge Top-100 Index was up 2.01% in 2011, while the MSCI World Index was down 0.4% in December and 9.9% for the year.
Total asset flows for 2011 were US$67 billion, which means the entire industry is now worth US$1.72 trillion. And the struggles of existing hedge funds did nothing to discourage the launch of new ones—2011 saw over 1,100 launches, another second-highest total. That said, capital raising remains difficult.
From a regional perspective, Latin American hedge funds provided the best returns for the year: up 2.84%. During the month of December, Latin American funds delivered positive returns (0.65%) but were outstripped by Japanese funds, which posted gains of 1.17% (although for the year, they were down 1.09%). Asia ex-Japan funds were down 1.32% in December and finished the year with negative returns of 12.85%.
As for strategies, fixed income and arbitrage were the best performing of the year— up 1.19% and 0.71%, respectively. For the month of December, fixed income funds added 0.22% while arbitrage funds gained 0.14%. Distressed debt funds turned in the best performance for the month, adding 1.34%, abetted by year-end risk-on trades—the BofA Merrill Lynch High Yield Index was up 2.48% in December. Distressed debt funds were down 2.69% for the year. CTA/managed futures funds gained 0.40% in December, to finish the year with a decline of 3.04%.
Long/short equities turned in the worst performance of the month, losing 0.73% to end the year with a loss of 7.43%. Macro strategies shed 0.49% for the month ended the year down 2.19%. Multi-strategy funds shed 0.18% in December ending 2011 down 2.51% while relative value funds lost 0.18% in December for a full-year loss of 2.51%.
Long-only absolute return funds chalked up their fourth annual decline in 2011, down 13.63% for the year.
As for assets, relative value hedge funds saw the largest percentage increase (year on year) in AUM, gaining 20% in 2011 while CTA/managed futures funds and macro hedge funds attracted the most money from investors—US$19 billion and US$16 billion, respectively, in net positive asset flows.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...