Hedge funds to post worst return in 14 years

By Sam Boughedda

Reuters reported Friday, in the last session before the new year, that global hedge funds are set to post their worst return in 14 years.

Aggressive interest rate hikes and other macroeconomic headwinds have significantly impacted asset prices in 2022. However, Reuters said that some hedge funds that put money to work in commodities and currencies using macro-focused strategies outperformed in 2022.

Using investment data from Preqin, the publication revealed that fund returns have declined 6.5% this year, the biggest slide since a 13% fall in 2008.

Macro-focused funds earned 8.2% through to November, while equity-hedged and event-driven strategies lost 9.7% and 4.7%, respectively, said Reuters, quoting data from HFR. In addition, Activist funds slumped by 13.8%.

On the other hand, they stated that trend-following strategies worked this year due to the inflationary environment.