The global hedge fund business returned +1.58% in December 2021, bringing the aggregate return for the industry for the year to +10.00%, according to just-released data from eVestment, a market intelligence provider under Nasdaq.
Almost 80% of funds reporting to eVestment posted positive results for 2021, with the average positive return coming in at +15.55%. For the small minority of funds that landed in the red for the year, the average return was -7.32%.
Investors rewarded the hedge fund industry’s strong performance in 2021 with significant inflows. Through November of 2021, investors plowed US$34.77 billion into the business. That new money and positive performance brought assets under management (AUM) for the industry to US$3.57 trillion through November.
“It’s easier to talk about the fund types that underperformed in 2021 since positive performance was so widespread last year,” says eVestment global head of research Peter Laurelli. “Brazil-focused funds posted the largest aggregate negative return in 2021 at -18.64%. China-focused funds also posted aggregate negative return in 2021 at -7.11%. Insurance-linked funds and FX/currency funds also ended the year in the red, but just barely. Generally, though, it was a good year for the business.”
Here are some of the biggest performance winners for 2021:
- India-focused funds were the biggest performance winners in 2021, with an aggregate return of +44.62%. These funds returned +3.89% in December.
- At +5.15% average returns in December, event driven - activist funds posted among the strongest monthly returns. At +27.28% for the full year, these funds were also among the biggest performance winners for 2021.
- Among the primary fund markets, commodities funds were top performers in December at +2.49% and for the full year 2021 at +20.58%.
- The biggest turnaround at the strategy level came from alternative risk premia funds, which returned an average of +7.65% in 2021, compared with -10.93% in the previous year.
- The biggest turnaround among the industry’s largest products came from the managed futures group, where the 10 largest funds returned an average of -1.29% in 2020 and this year produced the best returns across the largest fund strategy segments at +11.98%.