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Equity long-biased hedge funds have been the star performers for 2017 returning 16.78%, whilst long volatility and tail risk funds have ended at the bottom of the league tables down 11.00% and 13.86% respectively. Roughly 35% of the fund managers have posted double digit returns in 2017, up from 19% in 2016. Ongoing political and economic events hold much uncertainty in store for 2018, but in the interim, tax cuts in the US are likely to provide a further boost to equity markets.

Below are the key highlights for the month of December 2017:

• Hedge funds gained 0.84% in December and 8.24% for annual year 2017 with underlying markets, as represented by the MSCI AC World Index (Local) up 17.55% for the year. Almost 35.2% of the hedge funds posted double digit returns in 2017, up from 19.10% in 2016.

• The hedge fund industry grew by US$188.2 billion in 2017, with investor allocations of US$94.7 billion while performance driven gains of US$93.5 billion were recorded. In 2016, the industry shrunk by US$20.0 billion, with US$55.1 billion of investor redemptions driving the bulk of the industry contraction.

• Among developed market mandates, Japanese managers led with annual gains of 12.77%, followed by European managers up 6.93% while North American managers trailed behind with 6.62% returns.

• Emerging market mandates have preserved their gains for the year - up 17.39% with strong showing from underlying Latin America, Asia and Eastern Europe/Russia mandates. Frontier markets, as represented by the Eurekahedge Frontier Markets Hedge Fund Index is up 9.75% for the year.

• Asia ex-Japan mandated hedge funds were up 20.64% in 2017, their best showing since gains of 38.85% in 2009. Underlying Greater China and India mandated hedge funds were up 28.91% and 32.06% respectively for the year.

• Among strategic mandates, long/short equities hedge funds posted the best performance in 2017, gaining 12.45%, followed by multi-strategy and event driven hedge funds which were up 9.95% and 9.55% respectively.

• Among volatility-focused hedge funds, short volatility hedge funds posted the best performance in 2017 with gains of 9.20%, followed by relative value hedge funds which gained 3.40% over the same period.