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Hedge-fund returns badly lagged the stock market in 2019

By Andrea Riquier

Investors pulled over $130 billion out of hedge funds in 2019

Hedge funds returned 6.96%, on average, throughout 2019, according to data out Thursday, lagging the gains enjoyed in the broader stock market.

The data come from Eurekahedge, which compiled hedge-fund performance across four regions and nine strategies, with 85% of hedge funds reporting their November returns as of Dec. 31.

The strongest gains in all regions were found among long-short equity funds, which returned 8.64%. In contrast, the Dow Jones Industrial Averagegained 22.3%, the S&P 500rose 28.9%, and the Nasdaq Composite Indexjumped 35.2% over the course of 2019.

While the broad aggregate averages reported here conceal lots of individual variation, it has been a tough year for hedge funds (link). Big-name investors like David Tepper converted his fund into a family office, returning all outside money back to his investors. Mick McGuire and Louis Bacon, meanwhile, recently closed their funds, with Bacon citing "disappointing results."

Globally, investors pulled $131.8 billion out of hedge funds last year, Eurekahedge said, nearly $59 billion of which was in North America. In contrast, throughout most of 2019, investors plowed approximately $660.8 billion into exchange-traded funds, approximately 98% of which are passively managed (link) investing tools. (That data came from the Investment Company Institute (link), and represents total exchange-traded fund assets as of Nov. 30, 2019, compared with total assets 12 months earlier.)

-Andrea Riquier; 415-439-6400;

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(END) Dow Jones Newswires

01-02-20 1555ET

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