Hedge Funds End Wretched Year With Uptick

At the other end of the spectrum were indexes weighted in energy and materials, which dropped 36.9%. Fixed-income convertible arbitrage funds were down 34.6%, and equity hedge indexes were off 26.4%.

Lee Hennessee, managing principal of Hennessee Group, took pains to note that while the sector at large had a sharp decline, it still beat the broad markets by nearly 20 percentage points.

"On a relative basis, hedge funds continue to prove themselves as an attractive asset class, generating a better risk-adjusted return than traditional money management," said Hennessee.