Hedge Funds Lost Almost 6% Last Year as Markets Roiled Managers

(Bloomberg) -- Hedge funds posted a loss of 5.7 percent last year as managers struggled to capitalize on volatility and were roiled by political uncertainty.

For December, funds lost 1.9 percent, according to preliminary figures from the Bloomberg Hedge Fund Database.

The industry suffered through one of its worst years in 2018. Many managers not only failed to make money but did worse than the broader market. The return of volatility posed a challenge. The prospect of a trade war with China and the combative stance of President Donald Trump didn’t help.

For the year, the worst performers were Equity Hedge and CTA/Managed Futures strategies, which tumbled 7.8 percent and 7.2 percent, respectively. The only bright spots were Fixed Income Directional and Fixed Income Relative Value, which gained 0.2 percent and 1.3 percent, respectively.

Hedge Funds Lost Almost 6% Last Year as Markets Roiled Managers

In December, the worst performers were Event Driven funds, which slid 3.5 percent. Equity Hedge funds declined 3.1 percent. Macro funds, by contrast, rose 0.2 percent.

Final December and year-end data become available around Jan. 14. All data are total return including reinvested dividends.

For more data on hedge funds

  • See HFND and select option 3 for the Bloomberg Hedge Fund Database Snapshot, which offers more details on fund performance
  • See HFS to screen for specific hedge funds
  • “Equity Hedge” is a Bloomberg-created term for strategies where the largest subset of funds is long-short equity and long-biased

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