New York (HedgeCo.Net) – Hedge fund research firm Morningstar has reported in it’s preliminary hedge fund performance for 2012 as well as estimated asset flows through November.

The Morningstar MSCI Composite Hedge Fund Index rose 1.2% in December and advanced 6.0% for the year. Nearly all Morningstar MSCI hedge fund indexes ended 2012 in positive territory.

Credit-oriented hedge fund strategies were clear winners in 2012 as investors chased rising yields and high-yield bond and leverage loan issuance reached record highs. The Morningstar MSCI Distressed Securities Hedge Fund Index soared 13.1% during the year, outpacing most other hedge fund strategies tracked by Morningstar.

Frequent equity, commodity and interest rate market reversals throughout 2012 hindered trend-following hedge funds for the second year in a row. The Morningstar MSCI Systematic Trading Hedge Fund Index sank 3.5% for the year, making it one of the few strategies to conclude 2012 in the red.