Hedge Funds Just Had Their Best Year Since 2009


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.


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%.


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.