All hedge fund strategies had a good 2006, especially by comparison with the weaker performance of 2005, with the predictable exception (in a bull-market year) of short selling. Emerging markets did best, followed by event-driven and distressed securities.
These are among the chief findings of a new study entitled “Hedge Fund Performance in 2006: a Vintage Year for Hedge Funds?”, published by French business school, EDHEC. The study examines the performance of each hedge fund strategy included in the EDHEC Alternative Indexes, and concludes that 2006 was generally a sound year for the hedge fund industry.