World Stock Watch

Hedge Funds Shine in 2024 with Impressive Returns

The year 2024 proved to be a lucrative one for hedge funds, with many top performers raking in substantial gains despite the prevailing “America first” narrative in the broader market. While U.S. stocks and the dollar dominated global markets, some diversified funds demonstrated remarkable agility, adapting to the shifting landscape to deliver outsized returns.

Diversification Pays Off

Discovery Capital Management, for instance, saw its assets soar by a staggering 52%, building on its impressive 48% surge in 2023. This remarkable performance can be attributed to the fund’s multi-strategy approach, which allowed it to navigate different asset classes and geographies with ease.

Macro-Oriented Funds Thrive

D.E. Shaw’s Oculus, a macro-oriented multi-strategy fund, returned an impressive 36.1% in 2024, while its Composite fund delivered a respectable 18% gain. These results underscore the importance of a diversified investment approach, one that can effectively hedge against market downturns while providing consistent, risk-adjusted returns.

Citadel’s Flagship Fund Shines

Citadel’s Wellington multi-strategy fund returned a solid 15.1% in 2024, with its Tactical Trading fund and Equities fund delivering 22.3% and 18% gains, respectively. These results demonstrate the fund’s ability to adapt to changing market conditions, employing different strategies across various offerings to maximize returns.

Industry-Wide Gains

Millennium Management also reported a 15% gain, according to reports. These impressive returns are reflective of the industry as a whole, with hedge funds overall averaging a 10.7% return through the first 11 months of 2024, up from a 5.7% average return in the same period in 2023.

Stock Pickers Reap Rewards

Among global hedge funds taking long and short bets on stocks last year, the total weighted average return came in at 12.75%, according to a private Goldman Sachs note. This suggests that 2024 was indeed the year of the stock picker, with equity hedge funds successfully playing dispersion and leveraging creative shorting strategies to drive returns.