Investors in hedge funds saw portfolios advance by an average of 0.35 per cent in November, translating into a 4.89 per cent rise so far this year, with fixed income asset-backed strategies proving to be the standout performers so far in 2013.

The rise in the HFRI Fund Weighted Composite Index was the fifth gain in the last six months, said Chicago-headquartered Hedge Fund Research.

The Relative Value Arbitrage and Event Driven strategies were top contributors in November, with both the HFRI Relative Value Arbitrage Index and HFRI Event Driven Index gaining +0.7 per cent.

The HFRI RV: Asset Backed Index is the top area of sub-strategy performance since January, up by almost 16.0 per cent through November. Relative Value Arbitrage strategies have continued to attract investor capital for steady performance, having posted gains in 41 of 47 months since December 2008, HFR said.

Event Driven strategies, which invest broadly across Merger Arbitrage, Distressed and Activist situations, posted the sixth consecutive monthly gain, benefitting from a strong M&A environment, as well as increased and special dividends announced ahead of possible tax increases. The HFRI Merger Arbitrage and Distressed Indices gained by 0.8 per cent and 0.6 per cent, respectively, in November, while Activist managers posted gains of 2.8 per cent.

The biggest loser in November was the Short Bias Index, falling by 1.7 per cent in November from the previous month. The heaviest decline for any strategy so far this year is the Short Bias sector, down by 15.49 per cent.

“Hedge funds posted gains in November while limiting, modifying and, in some cases, reducing exposure on continuing fiscal, political and geopolitical uncertainty,” said Kenneth Heinz, president of HFR.