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Hedge funds returned 1.4% in December, ensuring the industry recorded a double-digital gain for two consecutive years

Tuesday, January 18, 2022
Opalesque Industry Update - Hedge funds returned 1.4% in December, ensuring the industry recorded a double-digital gain for two consecutive years for the first time in more than a decade.

The gain, made as stocks climbed and digital assets sank, saw HFM's Global Composite Index finish 2021 on 10.4% and with a three-year compound return of more than 36%. Event-driven was the year's top-performing top-level strategy at 15.0%.

All top-level strategies posted positive performance in December.

L/S equity finished the year in third place having led for much of H1. Around 80% of funds returned between 30% and -10%.

Four of HFM's seven top-level strategy indices returned double-digit gains in 2021 and all of them returned 5%.

Billion-dollar club funds finished 2021 on par with smaller funds at around 10%, having been outperformed in 2020. However, FoHFs returned under 7%, with 2021 proving more challenging for fund selection professionals.

One-quarter of event-driven funds posted a 20%+ gain in 2021.

Fixed income/credit funds had the narrowest spread, with around 80% of funds between 16% and -3%.

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