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$1billion Plus Hedge Funds Show Strongest Average Returns

The latest research by Preqin into hedge fund performance finds that as of the end of August, large Hedge Funds – those with AUM of $1bn or more* – posted the greatest returns of any size category. They outperformed emerging, small and medium funds for the month (with -1.49% returns), as well as across the 12-month (+4.30%), 3-year annualized (+9.06%), and 5-year annualized (+8.52%) horizons. They also had the lowest 3-year volatility of any size class, of only 3.29%. Emerging hedge funds, those with AUM of less than $100mn, had the lowest returns across all horizons, as well as the highest volatility.

Other Key Hedge Fund Performance Facts:

Sharpe Ratios: The rolling 3-year Sharpe ratios for all size classes have been rising since mid-2014. As of the end of June, large funds had the highest ratio of 2.84. Strong performance in the past 12 months has seen their ratio overtake those of small and medium funds.

Interquartile Range: While all fund sizes show a similar median performance, the interquartile range for emerging funds...