Hedge Funds Finish 2006 with Best Performance 3 Years, But Fall Short of S&P
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Hedge
Funds |
Hedge funds returned 13% globally in 2006, compared with a 15.8% increase (including dividends) by the S&P 500 Index, according to to Hedge Fund Research report today. It was the biggest gain for hedge funds since the 19.6% gain in 2003. |
Hedge funds returned an average 1.6% globally in December, led by gains in emerging markets, according to Hedge Fund Research, reports Bloomberg.
Other Highlights from HFR:
- Emerging-market managers were among the most successful in 2006, returning 25.1%.
- Macro funds, which bet on broad economic trends finished with an 8.8% gain.
- Funds focused on the boom in mergers and acquisitions had gains of 15.4%.
- Funds that sell securities short fell 2% last year, the only 12-month decrease of a single-strategy fund tracked by HFR.
- Equity hedge funds returned 11.7%.
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HFRI Monthly Performance Indices (%) |
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| Strategy | Dec'06 | 2006 |
| HFRI Fund Weighted Composite Index | 1.56 | 12.99 |
| HFRI Emerging Markets (Total) | 4.08 | 25.13 |
| HFRI Merger Arbitrage Index | 1.51 | 16.13 |
| HFRI Sector (Total) | 0.62 | 15.71 |
| HFRI Event-Driven Index | 1.77 | 15.42 |
| HFRI Distressed Securities Index | 1.22 | 15.26 |
| HFRI Relative Value Arbitrage Index | 1.79 | 12.59 |
| HFRI Convertible Arbitrage Index | 1.35 | 12.25 |
| HFRI Equity Hedge Index | 1.46 | 11.74 |
| HFRI Fund of Funds Composite Index | 1.68 | 10.33 |
| HFRI Fixed Income (Total) | 0.81 | 8.78 |
| HFRI Macro Index | 1.81 | 8.75 |
| HFRI Equity Market Neutral Index | 1.15 | 7.86 |
