Opalesque Industry Update: Hedge funds gained 1.63% in December, according to the Barclay Hedge Fund Index compiled by BarclayHedge. The Index had positive returns in 10 out of 12 months in 2012, and was up 8.27% at year-end.|
“Buoyant equity markets at the beginning of the month collided with fiscal cliff fears at mid-month, only to explode higher on December 31st,” says Sol Waksman, founder and president of BarclayHedge.
The Barclay Pacific Rim Equities Index was up 3.17% in December, Emerging Markets gained 2.87%, European Equities were up 2.24%, Equity Long Bias gained 2.04%, and Distressed Securities added 1.95%.
“Hedge fund returns outpaced the S&P 500 for a third consecutive month in December, but stilled lagged by 7.76 percent at year-end,” says Waksman.
Three of Barclay’s 18 hedge fund strategies lost ground in December. The Equity Short Bias Index dropped 5.97%, Technology lost 0.33%, and Equity Market Neutral slipped 0.06%.
The Healthcare & Biotechnology Index led all hedge fund strategies in 2012 with a 13.79% gain, Distressed Securities gained 12.05%, the European Equities Index was up 10.17%, Emerging Markets added 9.94%, Equity Long Bias was up 9.34%, and Fixed Income Arbitrage gained 9.33%.
“Now that the boomer generation has begun to swell the ranks of senior citizens and Obamacare is the law of the land, the outlook for healthcare and biotech appears to be bullish,” says Waksman.
The Equity Short Bias Index was the only losing hedge fund strategy in 2012, suffering a negative return of 24.18%. This is the biggest one-year loss for Equity Short Bias since BarclayHedge began tracking its performance in 1997. The previous record was a 23.95% loss in 2003.
The Barclay Fund of Funds Index gained 1.05% in December, and was up 4.60% in 2012.