The year 2012 has been something of a dud for the hedge fund industry, but there's hope on the precipice of the fiscal cliff (or on the precipice of a deal to avert it).
Hedge funds are rallying modestly this month, according to figures from Hedge Fund Research. The average fund added 0.75% in the first half of December, meaning that the first two weeks of the month contributed a substantial portion of the HFRX Global Hedge Fund Index's 3.35% return for the year.
With just one exception, all strategies and substrategies tracked by HFRX are up this month. Relative value funds are up 0.92% (3.25% YTD), emerging markets funds 0.9% (7.71% YTD), macro funds and commodity trading advisers 0.76% (down 0.89% YTD), event-driven funds 0.71% (5.35% YTD) and equity hedge funds 0.63% (5.01% YTD).
Among substrategies, systematic diversified CTAs are tops, up 1.35% (down 6.94% YTD, the worst of any strategy or substrategy), followed by fundamental growth funds (1.31% in December, 5.99% YTD), merger arbitrage funds (1.1%, 0.91% YTD) and multi-regional funds (1.09%, 4.8% YTD).
The only losing strategy in December so far is master-limited partnerships, which fell 1.95% to cut its year-to-date gain to 3.19%.
Of course, if the U.S. does careen off the fiscal cliff, all bets are off for month-end numbers.