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Hedge Funds End 2014 Up +2.48%; Managed Futures Lead at +8.63%; Emerging Markets a Mixed Bag
Hedge funds ended 2014 with an aggregate performance of +2.48%, with some surprising areas of strength in a volatile year.
Hedge funds ended a volatile and tumultuous 2014 with an aggregate performance of +2.48%, with December and Q4 hedge fund performance nearly flat at -0.15% and +0.03% respectively, according to Marietta-based eVestment’s December, Q4 and Year End 2014 Hedge Fund Performance Report. In 2013, by comparison, aggregate hedge fund performance was +10.19%.
Some key points from the report include:
· Managed futures funds ended 2014 as the best performing major hedge fund strategy, returning +8.63% in 2014. The last year managed futures produced industry leading performance was 2008. The largest managed futures funds performed far better than their peers in 2014, returning an average of nearly 14%.
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· Credit focused strategies have not enjoyed the recent global volatility and apparent risk-reduction which have favored managed futures funds. With further declines in December of this year, -1.69%, the universe’s fifth drop in the last six months, credit funds ended 2014 +0.55%, their worst year since 2008 and second worse since 1998.
· December capped a difficult quarter for strategies focused on equity markets and across the corporate capital structure. In December, long/short equity funds were -0.71% (+1.46% for the year); event driven funds declined -0.24% in December (hitting +2.97% for the year); and convertible arbitrage managers returned -0.07% (+1.56% for the year).
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· Emerging markets funds saw a mixed bag of results. India funds soared with +49.51% performance in 2014 (although they were down slightly at -2.15% in December), compared to a down annual result of -7.01% in 2013. Russia funds took a tumble due to protracted geopolitical issues in that area of the world, with 2014 performance of -39.68%, compared to a nearly flat result of -0.26% in 2013. China funds also saw strong results of +5.21% in December, +7.89% in Q4 2014 and annual 2014 performance of +8.61%, although that annual performance number was down from the +17.09% results China-focused funds saw in 2013.
· Event driven funds ended the year nearly flat, returning only +0.62% in aggregate for 2014, compared to +14.51% in 2013. Activist hedge funds, a sub-set of event driven, outperformed their peers in 2014 returning +2.97%, despite a decline of -0.91% in December.
To download a copy of the report, please click here.
