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Hedge funds - statistics & facts

Hedge funds are a type of alternative investment in which a manager chooses a wide range of investment strategies, typically not available to traditional mutual fund managers, such as credit strategies, event driven strategies, and equity strategies, just to name a few. Hedge funds are characterized by active management which attempts to provide higher returns than the market. As such, there are differences in fund management styles, ranging from higher risk strategies for more aggressive investors to safer and more modest strategies for pension funds and other more risk averse investors. The total value of assets managed by hedge funds worldwide reached around 4.53 trillion U.S. dollars in 2021.

Which strategy performs the best?

Most hedge fund strategies performed well in 2020, with positive net returns, while the start of 2021 generated a decline in returns and negative net returns for both equity strategies and multy-strategies. Despite the negative net returns in early 2021, hedge funds with equity strategies as top-level strategy - the most commonly used strategy - showed the highest net returns at the end of 2020, but hedge funds with event driven strategies had the highest net returns during 2021. The fund strategy with the highest asset inflow in 2020, however, was relative value strategies, with asset flows of 15.2 billion U.S. dollars that year.

How are cryptocurrencies used by hedge funds?

The recent rise of cryptocurrency hedge funds speaks to both the flexibility and continued relevance of hedge funds. Crypto hedge funds can either be hedge funds that manage portfolios containing exclusively cryptocurrencies, or funds that manage both cryptocurrency and other assets. Around two thirds of the active crypto hedge funds were launched in 2018 and 2019, and the leading locations of crypto fund managers in 2021 was the United States and the United Kingdom.

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