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Hedge Funds Wrap 2021 with a 1.26% Gain in December and a 10.32% Return on the Year

27 of 30 Hedge Fund Subsectors in the Black for 2021


The hedge fund industry returned to monthly gains in December, returning 1.26% on the month, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions.

By comparison, the S&P 500 Total Return Index was up 4.48% in December. For the year, the hedge fund industry posted a 10.32% cumulative return for 2021.

“In four of the last five years, the hedge fund industry has delivered a return between 10% and 11%, making 2021’s 10.32% return a solid result,” reflected Ben Crawford, Head of Research at BarclayHedge. “As a point of comparison, the S&P500 Total Return Index delivered investors a 28.72% return on the year. On the other hand, hedge funds generally were around 64% less volatile in 2021 than broad equity markets. Therefore, on a risk-adjusted basis, the average hedge fund actually outperformed the S&P500 Total Return Index, if only by a narrow margin.”

More than two-thirds of the hedge fund sub-sectors (23/30) posted gains in December. The European Equities Index took top honors for the month with a 4.86% return. It was joined on the podium by the Emerging Markets MENA Index, up 4.25%, and the Equity Long/Short Index which gained 3.31%.

Other notable December gainers included the Option Strategies Index, returning 3.28%, the Emerging Markets Sub Saharan Africa Index, advancing 3.05%, the Equity Long Bias Index, up 2.53%, and the Emerging Markets Latin American Equities Index, gaining 2.27%.

Sub-sectors losing ground in December included the Technology Index, down -1.69%, the Emerging Markets Eastern Europe Index, off -0.66%, the Fund of Funds Index, retreating -0.55%, the Emerging Markets Global Equities Index, down -0.31%, and the Merger Arbitrage Index, losing -0.26%.

All but three hedge fund sub-sectors were in the black for 2021. The Emerging Markets Eastern European Equities Index finished the year on top with a cumulative return of 19.86%, followed closely by the Distressed Securities Index, up 19.01%, and the Equity Long Bias Index which gained 17.52%.

Other 2021 performers of note included the Emerging Markets Sub Saharan Africa Index +15.58%, the Emerging Markets MENA Index +15.46%, the Emerging Markets Easter European Equities Index +13.76% and the European Equities Index which logged a +13.03% cumulative result.

The sub-sectors which ended the year in the red included the Emerging Markets Latin American Equities Index, down -13.16%, the Emerging Markets Latin America Index, off -7.27%, and the Healthcare & Biotechnology Index, losing -2.29%.

For a complete table of BarclayHedge Hedge Fund and Sub-Index results for December, as well as historical returns, click here.

About Backstop Solutions

Backstop’s mission is to help the institutional investment industry use time to its fullest potential. We develop technology to simplify and streamline otherwise time-consuming tasks and processes, enabling our clients to quickly and easily access, share and manage the knowledge that’s critical to their day-to-day business success. Backstop provides its industry-leading cloud-based productivity suite to investment consultants, pensions, funds of funds, family offices, endowments, foundations, private equity, hedge funds and real estate investment firms.

BarclayHedge, a division of Backstop, currently maintains data on more than 6,900 hedge funds, funds of funds and CTAs. The BarclayHedge Indices are utilized by institutional investors, brokerage firms and private banks worldwide as performance benchmarks for the hedge fund and managed futures industries.


Janet Falk

(212) 677-5770