MarketWatch – Hedge funds outperformed the benchmark Standard & Poor’s 500 stock market index in November for the first time since May as managers benefited from a falling U.S. dollar, sliding bond yields and a rebound in energy prices.
Managers tracked by Hedgefund.net returned 2.18% on average last month — vs. 1.65% for the S&P 500 — leaving them up 10.65% so far this year.
An index of managers compiled by Hedge Fund Research climbed 2.45% in November, leaving it up 11.69% this year. Five of the six hedge-fund strategy indexes run by Dow Jones also rose last month.
In May, the last time hedge funds performed better than the S&P 500, managers lost 1.46% on average, while the equity index dropped more than 3%.
Hedge funds can bet on falling as well as rising prices. That often means managers lag the broader stock market during a period of strong gains. That’s happened in recent months as the S&P 500 rallied to a six-year high.
However, other bets by hedge funds paid off in November.
