Hedge Fund Performance Update

December 2018

Originally published in the January 2019 issue

Hedge funds faced another tough month in December 2018, with losses increasing: the Preqin All-Strategies Hedge Fund benchmark returned -2.27%, bringing the 2018 full-year losses to 3.42%, the first negative year since 2011.

Macro strategies hedge funds returned +0.39% in December, helping to recover losses made in November (-0.79%) and bringing the 2018 return to +0.97%, making this the only top-level strategy tracked by Preqin to generate a positive return for December. Notably, returns for both equity and event driven strategies fell sharply, returning -3.17% and -4.22% in December respectively.

Hedge funds denominated in BRL continued to outperform funds denominated in all other currencies tracked by Preqin, returning +0.37% for December and continuing from the strong performance in November (+1.35%). This marks the 10th consecutive year of positive returns for BRL-denominated hedge funds.

Globally, all regions tracked by Preqin faced an adverse December. Hedge funds focused on emerging markets minimised losses (-0.63%), whereas those focused on North America experienced substantial losses (-3.40%). Hedge funds focused on the Asia-Pacific region ended 2018 with their lowest annual return (-9.13%) since 2008 (-22.25%).

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