Hedge Funds Up 9.73%

Jan 16 2014 | 1:04pm ET

Hedge funds disappointed in a big way in 2013, with returns at just a fraction of what investors could have earned in a Standard & Poor's 500 Index fund.

The average hedge fund returned just 9.73% last year, according to the Credit Suisse Hedge Fund Index, after a 1.19% December bump. The S&P500, by contrast, soared nearly 30%.

No strategy tracked by Credit Suisse came even close to that figure. The best-performing strategy of the year was long/short equity at 17.74% (1.8% in December), followed by distressed at 16% (1.94%), event-driven at 15.47% (1.61%), event-driven multi-strategy at 15.28% (1.47%) and multi-strategy at 11.23% (1.63%).

Equity market neutral funds added an average of 9.27% last year (1.3% in December), emerging markets 8.81% (1.28%), convertible arbitrage 6.03% (0.54%), risk arbitrage 4.89% (0.39%), global macro 4.32% (0.71%) and fixed-income arbitrage 3.8% (0.18%).

Just two strategies lost ground in 2013: Dedicated short-bias funds shriveled amidst the stock market rally, falling 24.94% (down 0.77% in December). Managed futures funds suffered a more modest decline, dropping 2.56% on the year after rising 0.1% last month.


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Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.

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