Hedge funds underperformed the broader market last month but should beat broader indexes next year, reports the Hennessee Group, a consultant and adviser to direct investors in hedge funds.
The Hennessee Hedge Fund Index rose 1.8% in November compared with a 5.3% gain for the Standard & Poor�s, a 6.5% advance for the Dow Jones Industrial Average and a 4.9% increase for the Nasdaq Composite. The Barclays Aggregate Bond Index rose 1.3%.
Year-to-date, however, hedge funds are up 22.2%, ahead of the S&P 500 with its 20.8% advance and the Dow, which has gained 17.9%. The Nasdaq is the best performing index, having gained 36% this year. The Barclays bond index is up 7.6%.
Charles Gradante, Co-Founder of Hennessee Group, said in a prepared statement:
�Hedge funds underperformed the broad markets in November as momentum continued to push security prices higher. We believe the market is close to entering the next phase, where stock prices will be driven by earnings, rather than multiple expansion.� This would be a better environment for hedge funds, and we expect them to outperform in 2010.�
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