Hedge funds last year delivered their strongest returns since 2009.
The HFRI Fund Weighted Composite Index delivered a return of 10.4%, the strongest calendar year since the index surged 20% in 2009, according to HFR, which produces hedge fund performance data.
Performance in December and throughout 2019 was led by equity hedge strategies. HFR said this was due to optimism over trade and the US economy driving US equities higher.
The HFRI Equity Hedge (Total) Index gained 2.7% for the month, bringing 2019 performance to 13.9%, the strongest year for the category since 2013.
Powerful risk-on sentiment dominated most of 2019, said Kenneth J. Heinz, president of HFR.
“Global financial markets experienced a correlated melt up in 2019, with strong gains across equities (led by US Technology), fixed income, commodities, and currencies,” he said.
While the core US economy and employment remains strong, the 2020 outlook reflects “positive but tempered” expectations, Heinz added. This is partly due to conflict in the Middle East, and the uncertainty of the US election, and “funds positioned for this dynamic, global, opportunity-rich environment are likely to lead industry performance and growth in 2020”.
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