Friday, 22 August 2014
Last updated 1 hour ago
Jan 9 2007 | 12:39pm ET
The average hedge fund fell shy of double-digit returns in 2006, according to year-end numbers from Hedge Fund Research’s HFRX indices, but several individual strategies, especially arbitrage funds, managed to return better than 10%.
Still, it wasn’t enough to top to broader markets: None of the dozen HFRX indices or subindices came close to the Standard & Poor’s 500’s 13.62% return.
The HFRX Global Hedge Fund Index rose 1.58% in December to hit 9.26% on the year, while the Equal Weighted Strategies Index closed 2006 with an 8.83% return after rising 1.47% last month. The Absolute Return Index lagged both, returning 1.26% in December and 7.43% on the year.
The best performers were the HFRX Market Directional Index and its subindices. Market directional funds returned, on average, 10.45% in 2006 (1.05% in December). The subindices in the double-digit club were merger arbitrage (10.73% in 2006, 0.85% in December), relative value arbitrage (10.65% in 2006, 1.69% in December) and event-driven (10.32% in 2006, 0.85% in December).
Of the remainder, the top performers included convertible arbitrage (9.57% in 2006, 1.34% in December), distressed securities (9.56% in 2006, 2.1% in December) and equity hedge (9.23% in 2006, 1.5% in December). Equity market-neutral funds had a brutal year, according to HFR, returning only 4.76% on the year (0.91% in December), and, in spite of a strong December during which it returned 2.58%, the HFRX Macro Index could only manage a 5.61% return in 2006.
Aug 4 2014 | 7:42am ET
By now, U.S. and international subscribers have received their home or office delivery of the special 500th issue of Futures magazine. You can too!—a very special offer follows. The issue is the largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders. Read more…
The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.
The Alpha Pages Editor's Note