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Global financial markets gained in December to conclude a strong 2021, as Oil surged and equities recovered early intra-month declines from fears of spreading Omicron coronavirus variant. Global equity markets posted strong gains for the month, led by US & European large caps with strength in Energy, Cyclical and Healthcare. US interest rates increased as supply chain shortages continued to drive inflationary pressures, while the US Dollar was mixed, falling against the British Pound, Euro and Swiss Franc, while rising against the Japanese Yen. Commodities also surged led by Oil, Metals gains were led by Aluminum & Copper while Agriculturals were led by Lumber & Soybeans. Hedge Funds and Risk Premia indices posted gains to conclude 2021 with the HFRX Global Hedge Fund gaining +0.47% for the month, +3.65% for the year, and the HFRX Market Directional gaining +0.95% for the month, +13.65% for the year.
HFRX Equity Hedge Index posted a gain of +1.70% for December and +12.14% YTD, its largest yearly performance since 2009, from gains in Market Neutral, Fundamental Growth and Value strategies. The HFRX Fundamental Growth Index posted a gain of +0.40% for the month and +18% YTD, its largest annual gain since 2017, from gains in exposure to small-cap US, European and Emerging Markets equities. The HFRX Fundamental Value Index gained +2.47% for the month, +10% YTD, from gains from exposure to large-cap US & European equities. The HFRX Market Neutral Index gained +1.18% for the month, +0.97% YTD, from gains in mean reverting, factor-based strategies and fundamental managers.
HFRX Event Driven Index posted a decline of -1.16% for December, +0.48% YTD, with gains in Merger Arbitrage strategies. The HFRX Merger Arbitrage Index posted a gain of +0.31%, +3.86% YTD, as activity in global M&A deals continued. The HFRX Special Situations Index posted a decline of -1.24% for the month, +0.29% YTD, from mixed performance in exposure to global catalyst-driven, fundamental value equities.
HFRX Macro/CTA Index posted a gain of +0.84% for December, -0.83% YTD, from gains in Global Discretionary and Systematic trend-following managers. Macro Discretionary managers posted gains from exposure to opportunistic Fixed-Income and global multi-asset strategies. The HFRX Macro Systematic/CTA Index posted a gain of +0.68%, -0.65% YTD, as the US Dollar was mixed against other currencies; Oil and Metals posted gains while most Agricultural commodities also gained for the period.
HFRX Relative Value Arbitrage Index posted a gain of +0.50% for December, +0.41 YTD, from gains in Multi-Strategy managers and Convertible Arbitrage strategies. The HFRX RV: Multi-Strategy Index posted a gain of +0.52%, +0.12% YTD, as interest rates increased during the month. The HFRX Convertible Arbitrage Index posted a gain of +0.31%, +3.62% YTD, as volatility modestly decreased during the period while yields rose.
 
Comments reference performance figures as of December 31, 2021