A pair of hedge fund index releases show that most hedge funds actually gained ground in the final month of 2008. Much too little, way too late: The average hedge fund fell by about one-fifth last year, making it one of the worst years in the history of the hedge fund industry.

The Hennessee Hedge Fund Index added 0.51% last month and Hedge Fund Research’s HFRI Fund Weighted Composite Index rose 0.42%. But the former lost 19.15% on the year, while the latter shed 18.3%. While the Hennessee Group’s Lee Hennessee put the most positive spin on the debacle possible, noting that the industry “significantly outperformed equity benchmarks on a relative basis—by almost 20%,” a spokesman for HFR was significantly blunter.

“The hedge fund industry concluded its worst year in history by snapping a six-month losing streak,” Chris Sullivan said. “Funds of funds also experienced their worst year in history, posting a decline of approximately 20% for the year.”

Another HFR index, the HFRX Global Hedge Fund Index, brought even more rain to the parade: It actually lost significant ground in December, falling 1.22%, leaving it down 23.25% on the year.

The biggest losers of 2008 included last year’s top strategy, emerging markets (down between 36.23% and 30.01%, depending on the index), convertible arbitrage (down between 20.87% and 58.37%) and distressed securities (down between 25.09% and 30.69%).

The few winners—of Hennessee’s 23 strategy indices, just two finished 2008 in the black—were led by short-bias funds, which rose between 26.31% and 28.25%, depending on the index. Macro funds also enjoyed a relatively successful year, adding between 3.37% and 5.66%. The HFRX indices show merger arbitrage funds in the black at 3.69%, a sentiment not shared by the otherwise more optimistic indices: The strategy lost 0.87% according to Hennessee, and 4.74% in the HFRI indices.

Compounding the hedge fund pain were year-end redemptions, which claimed as much as one-fourth of the assets the industry had left on Dec. 31.

“Year-end redemptions were significant, as the average fund returned 15% to 25% of investors’ assets,” Hennessee’s Charles Gradante said. “Combined with negative performance and complete liquidations, the entire hedge fund industry started 2009 at close to 50% of the capital it was at the beginning of 2008.”