FAIRFIELD, Iowa, January 19, 2016 — Hedge funds lost 0.64% in December according to the Barclay Hedge Fund Index compiled by BarclayHedge. The Index was up 0.29% at the end of 2015, its smallest yearly gain since 2011 when it declined 5.48%. The Index was unable to outperform the S&P 500 Total Return Index, which gained 1.38% last year.
“The year ended on a down note for risk assets as investors pondered the implications of slowing growth after several years of tepid recovery,” says Sol Waksman, founder and president of BarclayHedge.
Eleven of Barclay’s 18 hedge fund indices lost ground in December. Distressed Securities were down 1.54%, Equity Long Bias lost 1.35%, the Global Macro Index was down 1.08%, Convertible Arbitrage lost 0.96%, and the Emerging Markets Index gave up 0.59%.
“Lead by a ten percent decline in oil, commodity markets remained under selling pressure. The impact of the continued drop in oil prices also weighed heavily on energy related equities, currencies of commodity exporting nations, and high yield debt which finances fracking operations in the US,” says Waksman.
On the positive side, the Merger Arbitrage Index was up 1.20% in December, Pacific Rim Equities gained 1.07%, European Equities were up 0.79%, Healthcare and Biotechnology gained 0.64%, and the Equity Market Neutral Index added 0.55%.
Four hedge fund indices led all strategies in 2015. The Merger Arbitrage Index gained 7.88%, Pacific Rim Equities were up 7.69%, Healthcare and Biotechnology gained 7.09%, and Technology was up 7.05%.
The Merger Arbitrage Index has been a consistent winner since 1997, with gains in 17 of the past 19 years. The only annual losses were a 0.10% slide in 2002, and drop of 3.38% in 2008.
At the end of December, the Distressed Securities Index was down 9.86% for the year, Equity Short Bias lost 6.54%, Emerging Markets lost 2.68%, and the Event Driven Index was down 2.55%.
The Barclay Fund of Funds Index was down 0.60% in December, and ended the year with a 0.06% loss.
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