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Hedge fund business closes out 2021 with majority of funds reporting positive returns

Wednesday, January 12, 2022
Opalesque Industry Update - The global hedge fund business returned +1.58% in December, bringing the aggregate return for the industry for 2021 to +10.00%, according to the just-released December and year-end 2021 eVestment hedge fund performance data. Almost 80% of funds reporting to eVestment posted positive results for the year, with the average positive return coming in at +15.55%. For the small minority of funds that landed in the red for performance in 2021, the average return was -7.32%.

Investors rewarded the hedge fund industry's strong performance in 2021 with significant inflows. Through November of 2021, eVestment data shows investors plowing $34.77 billion into the business. That new money and positive performance brought overall hedge fund industry AUM to $3.57 trillion through November (the latest data available).

"It's easier to talk about the fund types that underperformed in 2021 since positive performance was so widespread last year," said eVestment Global Head of Research Peter Laurelli. "Brazil-focused funds posted the largest aggregate negative return in 2021 at -18.64%. China-focused funds also posted aggregate negative return in 2021 at -7.11%. Insurance-Linked funds and FX/Currency funds also ended the year in the red, but just barely. Generally though, it was a good year for the business."

India-focused funds biggest performance winners in 2021

India-focused funds were the biggest performance winners in 2021, with an aggregate return of +44.62%. These funds returned +3.89% in December.

At +5.15% average returns in December, Event Driven - Activist funds posted among the strongest monthly returns among all the fund types eVestment tracks. And at +27.28% for the full year, Event Driven - Activist funds were also among the biggest performance winners for 2021.

Among the primary fund markets eVestment tracks, Commodities funds were top performers in December at +2.49% and for the full year 2021 at +20.58%.

The biggest turnaround at the strategy level came from Alternative Risk Premia funds, which returned an average of +7.65% in 2021 vs. -10.93% in 2020.

The biggest turnaround among the industry's largest products came from the Managed Futures group, where the universe's 10 largest funds returned an average of -1.29% in 2020 and this year produced the best returns across the largest fund strategy segments at +11.98%.

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