- Last month hedge funds have achieved several gains
- Hedge funds faced its second-largest monthly surge, since they were first listed
- Several strategies helped hedge funds to surge, including digital currencies
With the end of this year, it is observed that hedge funds are gathering pace. On the back of the United States presidential election, hedge funds have achieved some of their biggest gains of the decades. Last month it was observed that Hedge Fund Researcher’s main Fund Weighted Composite has surged by 6.24%. However, it is found that, since December 1999, the hedge fund has its best monthly return.
Second-biggest monthly rise of hedge fund since its launch
Last month the hedge fund had its second biggest monthly rise since its index was launched around thirty years back. Since early of this year, the hedge fund index has surged approximately by 7.32%. Similar to this, HFRI’s investable benchmark has soared by 4.6% in the last month, which affected its year-to-date return by 5.6%.
How did hedge funds generate such performance?
According to Kenneth Heinz, the president of HFR, it is observed that a wider range of strategies like equities, event driven, and digital currencies, have helped hedge funds to soar in market upturn. Hedge fund packs were led by Equity-focused managers, and powered by the global stock market rise, which followed November’s rally and gained 8.73%. However, this year so far the index is up by approximately 12%.
All equities sub-strategies were positive last month
Last month all equities sub-strategies like multistrategy, fundamental value, and quantitative directional strategies, were in the positive area, as all surged by more than 10%. Indeed, the fundamental growth hedge funds gained more than 8.83%. On the other hand, it was observed that energy/basic materials strategies surged by 7.96%.
Simultaneously, the event driven strategies have surged by 5.37% this year, and last month have surged by 7.56%. The hand which helped topped the event driven category is of Activists hedge fund, that soared more than 12%, whereas special situations funds surged by 9.79%.
Now the hedge funds that traded cryptocurrencies, have enjoyed remarkable performance, as the crypto assets faced a stratospheric surge. It is observed that the HFRI’s Blockchain Composite Index has surged by 53% and has grown approximately 159% over 2020. On the other hand, the crypto index is up by 166% till date, whereas last month it soared by 57%.
However, the active trading, commodities, and currency focused hedge funds have failed to soar last month in the market upswing, which finished the month with red light.
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