FAIRFIELD, Iowa, January 14, 2010– Hedge funds rebounded from 2008 losses with a 24.14% gain in 2009 according to the Barclay Hedge Fund Index compiled by BarclayHedge.
“Based on our calculations, close to 55 percent of single manager hedge funds now have a profit for the time period from June 1, 2008 to December 31, 2009,” says Sol Waksman, founder and president of BarclayHedge. “Of those funds that are still in negative territory, the average loss is currently at 17 percent.”
June 2008 marked the beginning of the financial meltdown triggered by the demise of several Bear Sterns mortgage backed hedge funds.
The Barclay Convertible Arbitrage Index led the way up in 2009 with a 53.83% gain, more than making up for its 27.66% loss in 2008. The Emerging Markets Index was up 44.40% at year end, after losing 39.47% in 2008.
“Banks in emerging markets such as China, India and Brazil did not have large exposures to subprime mortgages, and therefore were able to avoid the massive write-downs forced on US and European banks,” says Waksman.
The Distressed Securities Index gained 32.78% in 2009 after falling 31.70% in 2008.
“As risk appetites returned, yield hungry investors drove up prices for distressed securities believing that the worst was over,” says Waksman.
The Equity Short Bias Index was the only losing hedge fund strategy in 2009, falling 19.17% for the year.
“The global stock market rally in 2009 made it difficult for hedge managers who only trade the short side of the market,” says Waksman.
“But let’s not forget that these same managers posted a record 40.91 percent gain in 2008.”
The 2009 performance data for all 18 Barclay Hedge Fund Indices is available now at www.barclayhedge.com.
In December, 16 of Barclay’s 18 hedge fund indices had a positive return. The Barclay Distressed Securities Index jumped 4.57%, Technology was up 3.74%, Healthcare & Biotechnology gained 3.17%, Equity Long Bias was up 3.41%, and Emerging Markets gained 3.35%.
On the losing side, the Barclay Equity Short Bias Index fell 4.78% in December, and Global Macro was down 0.82%.
The Barclay Fund of Funds Index gained 0.71% in December, and is up 10.18% for the year.
Click here to view five years of Barclay Hedge Fund Index data, or download 11 years of monthly data.
Sol Waksman is an experienced media source, providing perspectives on hedge fund and managed futures trends. For more commentary or background, call 641-472-3456 or email swaksman@barclayhedge.com.
BarclayHedge (formerly The Barclay Group) was founded in 1985 and actively tracks more than 6,000 hedge funds, funds of hedge funds, and managed futures programs. Barclay has created and regularly updates 18 proprietary hedge fund indexes and eight managed futures indexes.
Institutional investors, brokerage firms and private banks worldwide utilize BarclayHedge data as performance benchmarks for the hedge fund and managed futures industries.