The Tell: Hedge funds beat the market in January, report says

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Hedge funds clinched higher returns than the broader stock market in January, a reversal of fortune for an industry that’s lagged behind significantly in recent years.

The broad Eurekahedge Hedge Fund Index returned 0.17% in January, beating the 0.16% decline in the S&P 500 index SPX, +0.44%, but lagging behind the tech-heavy Nasdaq Composite Index COMP, +0.47%, which gained 1.99%, according to data out Tuesday.

Read: A hedge-fund strategy inside an ETF: Good idea? Bad idea?

Eurekahedge also released full-year 2019 returns. Its main index showed hedge funds had returns of 8.66% for the year, a disappointing outcome compared with the 28.88% pop for the S&P 500.

In January, the worst performing regional hedge fund group was North America, which lost 0.30%. The best performing region was Latin America, with a 1.58% gain. The biggest loser among strategies was short volatility, which declined 1.60%, while the best performer was cryptocurrency, which gained 20.49%.

The recent string of flops isn’t helping hedge funds win more clients. Eurekahedge reported earlier that hedge funds had seen outflows of $131.8 billion throughout 2019. Meanwhile, exchange-traded funds picked up over $1 trillion during the year, according to the Investment Company Institute. About 98% of all ETF assets are in passive strategies, as MarketWatch has previously reported.

Related: What is asset allocation?

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