Hedge Funds Just Had Their Best Year Since 2009

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trading desk

Business Insider

The Hedge Fund Research Index, published by fund analysts HFR, had it's highest gains since 2009, according to reporting by the FT.

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The monthly index, which proxies for hedge fund returns across sectors, gained 1.5% last month, which pushed up its year-to-date performance by 7.2%.

Hedge funds haven't performed this well since 2009, when they were yielding returns of over 20%. As the S&P has risen to ever higher all-time highs, hedge funds have had a hard time finding new sources of alpha.

Growth in returns on quant equity strategies pushed the index up, growing by 2.67% last month. Equity strategies in general performed very well, while returns on short strategies fell by nearly 2%.

Emerging markets strategies also had a good month, growing by 2.45%.

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But compared to passive investing strategies, hedge fund returns remain mediocre.

The FT writes:

"With 60 per cent in Vanguard's S&P 500 tracker (VFINX) and 40 per cent in its Total Bond Fund (VBMFX) your passive portfolio would have quietly appreciated 11 per cent this year."

All this hooplah and back-patting aside, all this means hedge funds still haven't beaten the S&P 500 this year.

So there's that.

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