Hedge funds recorded a -0.23% return in December amid volatile market conditions and trend reversals that persisted into the last month of 2011. The Eurekahedge Hedge Fund Index was down 4.15% for the year, making it the second worst yearly return on record. Hedge funds continued to outperform the MSCI World Index, which was down 0.40%1 in December and 9.9% for 2011. The outperformance was led by the larger funds as evident from positive figures posted by the Mizuho Eurekahedge Top 100 Index, which was up 1.87% in 2011.
Most regional hedge funds delivered gains in December while distressed debt hedge funds brought in the highest percentage gain for the month among the different strategic mandates. Latin America was the top performing hedge fund region in 2011 while fixed income mandates saw the highest returns among strategies.