It was a year of double-digit growth, but below the performance of the previous year, 2021 for hedge funds. Hedge funds produced an aggregate performance of returns of + 10.3%, down from 11.8% the previous year, according to the HFRI Fund Weighted Composite index.
This is the third best performance since 2009, when growth was just under 20% (+19.98%). Overall, total assets exceeded $ 4 trillion for the first time.
Hedge funds are sparking crypto in 2021
If this is the overall picture, at the sector level, the sub-index that measures the performance of shares recorded an increase of 11.96% last year against 17.89% the previous year, lower than the increase in the ‘S&P 500 index of 26.89%. The real winners were the cryptocurrencies: the corresponding benchmark scored + 215%, better than the + 193% scored in 2020.
The year was “dominated by uncertainty and high volatility while the managers faced the challenge of rising interest rates and inflation, as well as the impacts of the second year of the global coronavirus pandemic “, analysts at HFR said, highlighting that yields have started to rise again. in December (+ 1.28%), after the decline in November (- 2%).
What to expect in 2022
“Hedge funds are leaving two years of robust growth behind them despite extreme volatility and market cycle distortions,” he said. Kenneth J. Heinz, president of HFR in a press release accompanying the data, adding that “in 2022, hedge fund managers, in light of the pandemic emergency, expect volatility to continue. From a strategic point of view, considering the powerful dynamics ofincrease in interest rates and record inflation, the focus is on capital preservation in the equity, bond and commodity markets “.