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Cruel winter winds blew the hedge fund industry off course, with a -1.22% loss in November, bringing YTD gains to 8.89%

Thursday, December 09, 2021
Opalesque Industry Update - The hedge fund industry posted a monthly loss in November, down -1.22% for the month, according to the Barclay Hedge Fund Index compiled by BarclayHedge. By comparison, the S&P 500 Total Return Index was down -0.69% in November.

For the year to date, the hedge fund industry gained 8.89% through November. The S&P 500 Total Return Index advanced 23.18% over the same period.

November was a sea of red for most of the Hedge Fund world, with only a handful posting monthly gains. Sub-sectors that were in positive territory for the month were the Equity Market Neutral Index advancing 0.77%, and the Distressed Securities Index gaining 0.76%. The Merger Arbitrage Index and the Emerging Markets MENA Index finished November just over the line into the win column, returning 0.03% and 0.02%, respectively.

Sub-sectors losing ground in November were led by the Healthcare & Biotechnology Index, off -5.95%, followed by the Emerging Markets Global Fixed Income Index, down -5.21%, and the European Equities Index which lost -3.07%. Others in the red for the month included the Emerging Markets Global Equities Index, down -3.03%, the Emerging Markets Global Index, off -2.83%, and the Emerging Markets Eastern Europe Index, losing -2.16%.

All but four hedge fund sub-sectors retain year-to-date gains through November. Leading the way was the Emerging Markets Eastern European Equities Index, which is up 25.12% followed by the Distressed Securities Index, which has advanced 23.72%, and the Emerging Markets MENA Index, which was up 17.78%. Other sub-sectors gaining ground on the year included the Equity Long Bias Index +15.55%, the Technology Index +14.11% and the Emerging Markets Sub Saharan Africa Index +12.44%.

In negative territory for the year to date were the Emerging Markets Latin American Equities Index, down -15.51%, the Emerging Markets Latin America Index, losing -9.76%, the Emerging Markets Global Fixed Income Index, off -4.72%, and the Healthcare & Biotechnology Index, down -4.08%.

"Markets faced a variety of headwinds in November, including a global COVID case number surge, on-going inflation and a pricing-in of faster-than-anticipated reduction in stimulus by the Fed," said Ben Crawford, Head of Research at BarclayHedge. "The cruelest gale blew in the last week of the month with news of the discovery of the so-called Omicron variant of the COVID-19 virus in the population. Officials worried openly that this offshoot could be hundreds of times more infectious than its predecessors. The announcement rattled markets further, contributing to the Dow's worst one-day loss this year."

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