For hedge funds that made money this year, there was only one strategy that really mattered - latching onto the stockmarket rally.

For everyone else 2013 proved another tough year as big-name funds as varied as global macro, commodity and computer-driven funds struggled to make money, eating further into the track record of these one-time 'masters of the universe.'

So far this year the average hedge fund is up 8.2 percent - their best year in three but lower than a near 21 percent rise in the MSCI World Index for stocks.

More worrying is that longer-term performance over key three- and five-year periods is also looking poor.

Hedge funds have made returns for their investors of 9.4 percent since 2011, and 39.6 percent since 2009, data from Hedge Fund Research shows, but an investment in a fund tracking global stocks would have made around 32 percent and 75 percent respectively.

"If you look at the average hedge fund versus equity or directional markets, this year has been disastrous," Roberto Botero, a director at Sciens Capital said.

"In general you would expect hedge funds to underperform in an equity market rally. But the issue is they have been underperforming for the last five years, with very few exceptions," Botero said.

The problem this year has centered on managers' inability to get ahead of central bank monetary action, which has driven markets, and the fact asset prices have headed upwards almost continuously, leaving funds which "hedge" against downside risk left behind.

Hedge funds claim that they can make money in all markets and deliver returns with less volatility than traditional assets over the medium term, but this can be a hard sell when stock markets are rising so quickly.

"Arguably in the long term it's fine but it doesn't feel good when equity markets are up 20 percent or more," said Anthony Lawler, who invests in hedge funds at asset manager GAM.