Despite equity markets being ravaged by Covid-19 last year, hedge funds rode the recovery waves and the Preqin All-Strategies Hedge Fund benchmark had a full year return of 16.69 percent.
Other information from the alternative asset class information provider Preqin showed the same benchmark rose by almost 4 percent in December alone, showing a drastic turnaround from the ill effects of the pandemic earlier in the year.
Event-driven strategies were the best-performing sub-category in December, gaining 6.45 percent and pushing their 2020 year-to-date return to 13.28 percent.
Equity strategies followed, with gains of 4.95 percent in December contributing to a 19.59 percent year-to-date return – the highest of all strategies.
In terms of currencies, hedge funds denominated in dollars were the best performing in December, gaining 4.68 percent and finishing 2020 with an impressive 20.60 percent full year return.
CTAs, often the worse performing hedge fund strategy, actually protected capital in 2020 and made solid gains to end the year. Systematic CTAs outperformed discretionary returning 4.95 percent to 2.69 percent in December respectively.
However Euro denominated CTAs were the only CTA category with a negative three-year annualised return at minus 2.02 percent.