Liquid Alternatives: The Wilshire Liquid Alternative Index Gains 1.68% in December
It underperformed the 2.45% return from the HFRX Global Hedge Fund Index.
The Wilshire index provides a representative baseline for the performance of the broader liquid alternatives space.
According to Wilshire Associates, the index aims “to deliver precise market measures for the performance of diversified liquid alternative investment strategies implemented through mutual fund structures, backed by a proprietary classification methodology.”
“Markets enjoyed a strong finish to 2020 as clarity surrounding the U.S. election and the announcement of two COVID-19 vaccines pushed markets to all-time highs,” said Jason Schwarz, Chief Operating Officer of the firm said in a statement.
How the indices fared
The Wilshire Liquid Alternative Index measures the collective performance of the five Liquid Alternative strategies that make up its Liquid Alternative Universe.
The Wilshire Liquid Alternative Index is designed to provide a broad measure of the liquid alternative market by combining the performance of the firm’s Liquid Alternative Multi-Strategy Index, Liquid Alternative Equity Hedge Index, Liquid Alternative Event Driven Index, Liquid Alternative Global Macro Index, and Liquid Alternative Relative Value Index.
Here is a recap of the individual indices.
- The Wilshire Liquid Alternative Equity Hedge Index gained 5.81% in the quarter ended December. That underperformed the HFRX Equity Hedge Index and its quarterly gain of 7.77%. Equities began the quarter on a somewhat somber note on a resurgence in the virus and political apprehensions. However, finality around the U.S. election and vaccine announcements soon dispelled these fears and markets marched instead to record highs.
- The Wilshire Liquid Alternatives Event-Driven Index gained 3.75% in the December quarter. That underperformed the 4.13% quarterly return from the HFRX Event Driven Index.
- The Wilshire Liquid Alternative Global Macro Index finished the December quarter up by 4.40%. It outperformed the HFRX Macro/CTA Index and its quarterly return of 4.18%.
- The Wilshire Liquid Alternative Relative Value Index finished the quarter up 3.63%. That fell short of the quarterly gain of 3.82% from the HFRX Relative Value Arbitrage Index.
- The Wilshire Liquid Alternative Multi-Strategy Index returned 1.99% in December and 4.47% for the quarter.
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