Infographic: 2013 Periodic Table of Hedge Fund Returns
(January 27, 2014) – Not since convertible arbitrage’s blow-out year in 2009 has a hedge fund strategy performed as well as long/short equity did in 2013.
Riding the stock market on the up and down sides, fund managers averaged 17.7% gains for the calendar year, according to the latest “Periodic Table of Hedge Fund Returns” produced by Boomerang Capital, a Connecticut-based hedge fund advisory. That performance more than doubled their 2012 average of 8.2%.
Distressed securities—2012’s best performer at 11.8%—came in second last year, with a typical fund returning 16%. Multi-strategy was next at 11.2%, precisely the same gain it averaged the year prior.
Emerging markets started the year well: with 4% gains as of March 15, the strategy was on track to top Boomerang Capital’s 2013 Periodic Table. However, their performance softened throughout the following months, and finished the year in the middle of the pack, with average returns of 8.8%.
Indeed, investors’ sell-off of emerging markets assets has been blamed for market declines of early 2014.
On the negative side of the table, the same two strategies held onto their dubious distinctions.
Funds dealing in managed futures fared slightly better than in 2012, reporting an average decline of 2.6%.
Short-bias operations, however, suffered another serious blow amid a booming 12 months for global equities. The typical fund lost one quarter (24.9%) of its assets. That followed an average drawdown of 20.4% in 2012, 22.5% in 2010, and 25% in 2009. These short-focused funds did act as a hedge against rough markets in 2008 and 2011, gaining a 14.9% and 3.8% respectively.
Boomerang’s table is based on index data from Credit Suisse through December, and ranks the strategies based on total returns. Check out Boomerang Capital’s archived tables here.
Related Content: Where Were the Best-Performing Hedge Funds in 2013?; Hedge Funds: Winning Hearts and assets in 2013
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Categories: Hedge Fund, Investment Wisdom, Statistics, Trends, Patterns, Indicators