LONDON (HedgeWorld.com)–The FTSE Hedge Global Index is on a roll, with four positive months of performance, albeit in modest terms for each month.
For the 12 months ended Dec. 31, the tabulators saw FTSE Hedge index gain 2.7%, while the FTSE All-World equity index gained 13.7%. Still, FTSE officials remain optimistic about strategies such as event-driven and long/short equity, which have driven recent index performance.
Directional and event-driven strategies expanded their lead over the non-directional approaches, which lost a combined 0.2% last month and finished the year at negative 1.1%. As arbitrage managers posted losses, event-driven and directional investment styles returned in excess of 85 basis points each.
Equity hedge funds and distressed managers in particular met success in December with each returning 1.7% and accounting for much of the FTSE index’s gains in December. Other directional strategies didn’t fare as well. Commodity trading advisers were up only 0.7%, and global macro managers lost 1.2% over the course of the month.
In November, convertible arbitrage vehicles were the losers–giving up 2% for the month. In December, they bounced back some, dipping by just 0.1%, while equity arbitrage was the worst-performing strategy with a loss of 0.5% for the month and a return of negative 3.0% for the 12 months.
The FTSE index 12-month numbers are similar to those posted by the S&P Hedge Fund Index (3.88%) and the Dow Jones Hedge Fund Indexes, which saw distressed strategies pick up 14.74% in 2004.
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