Hedges Funds Have Strong November

Dec 12 2006 | 10:09am ET

A hedge fund index has finally beaten the Standard & Poor’s 500, at least for a month.

Early estimates from HedgeFund.net show its HFN Hedge Fund Aggregate Average and HFN Fund of Funds Aggregate Average, as well as most of their subindices, bested the S&P in November, the former returning 2.18% and the 1.79% to the S&P500’s 1.65%. But on the year, the broad-market S&P is still tops at 12.2%, while the hedge fund index lags at 10.65% and the fund of funds index at 7.92%.

However, as an equal-weighted index, HFN’s numbers are known to skew towards younger, smaller and historically better performing hedge funds.

That said, November’s numbers already have HFN’s indices above their full-year returns for 2004 and 2005. The month was particularly kind to the HFN Energy Sector Average, which rose 4.76% on the month (14.89% year-to-date) on the back of rising oil and gas prices. CTA/managed futures enjoyed strong returns, as well, at 3.05% in November (6.94% on the year), along with emerging markets (2.87% in November, 17.96% YTD) and HFN Asia regional average (2.7%, 7.17% YTD).

The only strategies lagging the S&P last month were convertible arbitrage, up just 0.8% (but 11% YTD), equity market-neutral (1.1%, 6.02% YTD) and macro (1.45%, 7.85% YTD).


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Editor's Note