Hedge fund performance mixed, but some bright spots with fundamental growth and systematic macro

Hedge funds returns were mixed for November, but the fundamental growth and systematic macro strategies generated strong returns of over 1 percent. The fundamental growth strategy is the HFR leader for the year with a return profile at over 17%. The macro systematic strategy again generated a strong positive return. The HFR macro systematic index return was significantly higher than other systematic indices for November which suggest a high dispersion across managers in this category. The macro/ CTA which includes discretionary managers was actually down for the month. The absolute return, special situations, and emerging markets strategies were the biggest down strategies for the month, but all showed declines of less than one percent.

Hedge fund strategy returns are all positive for the year through November albeit the majority of the indices have returns below four percent. The outliers were strategies that have strong directional equity exposure. A fuller analysis relative to benchmark factors is needed to determine the quality of returns, but at this point even the diversifying strategies have outperformed traditional fixed income benchmarks.