Despite a solid last couple of months, hedge funds broadly speaking turned in lackluster results for 2005, according to preliminary research by Absolute Return. After a 0.79% December gain, the Absolute Return Composite Index wound up the year at 5.6%, its worst annual performance on record. The Composite has averaged annual returns of 10% since its 1998 introduction.
Overall, hedge funds turned in their best performance in last year's third quarter, when not a single Absolute Return index had a negative month. That quarter also included the Composite's biggest gain of 2005: July's effort of 1.47%.
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