Bloomberg Global Data
This was written by Tucker Piner.
The Bloomberg All Hedge Fund Index gaining over 9% last year, compared to a fall of almost 6% in 2018. 2019 proved to be the second best performing year of the last five, with only 2017 seeing the index post marginally higher returns.
Despite positive returns across all the Bloomberg hedge fund indices last year, they still trailed the broader market with the S&P 500 Index ending 2019 with a total return of over 30%.
In terms of returns, strategies with higher market exposure – or beta - saw better performance, with the Bloomberg Equity Hedge Fund Index, proving to be the highest performer of the broader strategies, posting a gain of 12.68%. Within the Equity Hedge category, our Long Bias HF Index (BHEQLB Index) posted the biggest year-to-date gain (up 15.70%), followed by the Long Short HF Index (BHEQLS Index), which returned 11.80% by the end of the year – both buoyed by a rallying equity market.
Event-driven managers saw some of the biggest gains last year, with the index (BHEVT Index) ending the year up 7.75%, the second best performing main strategy. Of the event driven focused hedge fund indices, our Multi-Strategy HF Index (BHEVMS Index) - up 8.22%, and Merger Arbitrage HF Index (BHMARB Index) - up 7.39%, did particularly well.
After a low performing 2018, Credit strategies gained strength in 2019, with the Bloomberg Credit Hedge Fund Index up 7.02%. This compared to a return of 0.82% the previous year. Within this category, the Bloomberg Emerging Market Debt Hedge Fund Index yielded the highest return, up almost 10% for the year.
Last year saw macro managers with renewed life after a challenging 2018, with the broader index (Bloomberg Macro Hedge Fund Index) up 6.47% compared to decline of almost 7% in 2018. Increased market uncertainty is giving the investor community renewed interest in these strategies. The upcoming US Election, Brexit, trade negotiations and now the coronavirus, position these strategies to execute in the current environment.