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Hedge funds having worst year since 2011

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Reasons small hedgies swimming upstream

For hedge funds, 2015 has been a year of good news and bad news.

First the good: Amid all the market volatility, the $3 trillion hedge fund industry has outperformed the lackluster 3 percent drop the has turned in.

Now the bad: Despite the outperformance, the group is headed for its worst full-year returns in four years, according to organizations that track the industry. Hedge funds collectively lost more than 8 percent in 2011, but haven't had a negative year since.

A miserable September saw hedge funds lose 1.44 percent, thanks to a 2.2 percent decline in equity-based strategies and a 2.5 percent drop in North America strategy, according to numbers Preqin released Thursday. That brings the full-year return of the Preqin All-Strategies Hedge Fund Benchmark barely above even, with a 0.18 percent gain.

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Pretty much the only thing that worked during the month was relative value, a strategy that looks to exploit price differences between related assets. That part of the hedge world eked out a 0.26 percent return for the month.