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Hedge Funds

HFR: Hedge funds end 2017 up 8.54%, 3 percentage points higher than previous year

Hedge fund returns for the year ended Dec. 31 resulted in the "first perfect calendar year" since 2003 with positive performance in every month, Hedge Fund Research reported Monday.

The HFRI Fund Weighted Composite index returned 8.54% in 2017, compared to 5.44% in 2016, HFR's year-end analysis showed. The 2017 index return was the 16th best in the 28 years that HFR has tracked hedge fund returns since 1990.

For the quarter ended Dec. 31, the HFRI Fund Weighted Composite index returned 2.51%, compared to 2.23% in the previous quarter. The index returned 1.17% in the fourth quarter of 2016.

The HFRI Asset Weighted Composite index returned 6.49% in 2017 in contrast to the 2.83% return of the index in 2016.

Performance of the HFRI Asset Weighted Composite index was 1.97% in the three months ended Dec. 31; 1.74% in the quarter ended Sept. 30; and 2.12% in the three months ended Dec. 31, 2016.

The HFRI Fund of Funds index returned 7.74% in 2017, up sharply from 0.51% in 2016. Index performance in the three months ended Dec. 31 was 2.03%, compared to 2.32% in the previous quarter and 0.86% in the fourth quarter of 2016.

"The powerful combination of surging global equity markets, dynamic (merger and acquisition) trends, commodity volatility and divergent rate cycles has created an exciting opportunity set for hedge funds coming into 2018," said Kenneth J. Heinz, HFR's president, in a news release accompanying the data analysis.