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Hedge funds’ historic 2020 haul

One of the most turbulent years in modern history is coming to an end — and hedge funds are racking up their best returns in a generation.

Hedge Fund Research’s HFRI 500 — an equal-weighted index of the world’s largest hedge funds’ returns — soared 6.2 percent in November from October, its biggest month-tomonth gain since December 1999 and the second-largest since the index’s inception in 1990.

Year to date, the HFRI 500 is up 7.3 percent.

The record-setting monthly performance comes after the coronavirus outbreak sent 2020 into a tailspin, shuttering huge portions of the global economy, sending unemployment soaring and putting the market into a March crash that saw the S&P 500 fall more than 33 percent in less than a month.

The HFRI 500 fell 12 percent in the first three months of 2020, dropping more than 9 percent in March alone.

But hedge funds have weathered the storm and are benefiting from a market rebound that has the S&P 500 up more than 16 percent on the year, with the biggest surge coming in November.

That bounce was “driven by a combination of the US election results and optimism regarding development, approval and availability of multiple coronavirus vaccines,” HFR president Kenneth Heinz said in a statement.

It almost didn’t even matter what hedge funds were doing in November as virtually every strategy seemed to be a winner.

Funds focused on equities led the pack, popping 8.7 percent in November, reflecting a stock market that skyrocketed almost 11 percent.

An uncertain global economic picture and a resurgent COVID wave decimating the US caused funds focusing on so-called macro trends to fare the worst, gaining only 1.3 percent in November.