Hedge Fund Industry Returns 3.29% in December and Ends the Year Up 10.95%, According to Backstop BarclayHedge

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Three of the past four years ended with double-digit gains for hedge funds

The hedge fund industry posted a second consecutive positive month in December, returning 3.29% according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions. By comparison, the S&P 500 Total Return Index was up 3.84% in December.

For the year, the hedge fund industry gained 10.95% in 2020, its third double-digit annual return in the past four years. The S&P 500 Total Return Index was up 18.40% over the 12 months.

Thirty of the 31 sectors tracked by the Barclay Hedge Fund Indices posted gains in December, the outlier being the Emerging Markets MENA Index which was down 0.98%.

“While some indicators pointed to a slowing economy as COVID-19 cases surged, stock markets responded well to new economic stimulus developments,” said Sol Waksman, president of BarclayHedge. “Meanwhile, vaccine approvals and initial distribution offered hope to Investors for a return to normal. The S&P 500 Total Return Index finished 2020 at record highs.”

Leading the way among December’s gainers was the Emerging Markets Asian Equities Index, returning 6.59% for the month. The Emerging Markets Global Equities Index was up 6.34%, the Emerging Markets Latin American Equities Index returned 5.41%, the Healthcare & Biotechnology Index advanced 5.33%, and the Emerging Markets Eastern Europe Index gained 5.10%.

In a year in which the pandemic prompted an even greater reliance on technology and focus on health care, the Technology Index set the pace for 2020, gaining 34.10% over the 12 months, followed by the Healthcare & Biotechnology Index which was up 27.51%.

Other leading sectors over the 12-month period included the Emerging Markets Asian Equities Index, up 25.76%, the Emerging Markets Global Fixed Income Index, returning 23.30%, and the Equity Long Bias Index, gaining 16.16%.

Sectors in the red for 2020 included the Emerging Markets Latin America Index, down 6.45%, the Emerging Markets MENA Index, off 4.14%, and the Equity Market Neutral Index, giving up 1.23%.

Twenty-seven sectors posted annual gains. Only 4 sectors posted losses

For a complete table of BarclayHedge Hedge Fund and Sub-Index results for December, as well as historical returns, click here.

About Backstop Solutions

Backstop’s mission is to help the institutional investment industry use time to its fullest potential. We develop technology to simplify and streamline otherwise time-consuming tasks and processes, enabling our clients to quickly and easily access, share and manage the knowledge that’s critical to their day-to-day business success. Backstop provides its industry-leading cloud-based productivity suite to investment consultants, pensions, funds of funds, family offices, endowments, foundations, private equity, hedge funds and real estate investment firms.

BarclayHedge, a division of Backstop, currently maintains data on more than 6,900 hedge funds, funds of funds and CTAs. The BarclayHedge Indices are utilized by institutional investors, brokerage firms and private banks worldwide as performance benchmarks for the hedge fund and managed futures industries.

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