Sic transit annus horribilis

Sagitta Asset Management put it best in December - 2004 would be remembered by many as providing horrendous conditions for hedge funds.

Rising rates - a Fed Funds rate at 2.26% compared to 1.01% at the start of the year - mixed with falling volatility (VIX index down 42% from its March high for 2004) - and tightening credit spreads came together with trendless markets and an oil price up 33% in 2004 to 17 December.

Most managers have ridden out the storm, and some, such as emerging markets

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