Hedge funds sealed the first quarter of the year with another month of negative returns, down 0.35%1 in March as managers navigated through a choppy start to the year. However, strong returns posted by fund managers in the previous month saw them through with the Eurekahedge Hedge Fund Index up 0.87% in Q1 2014, outperforming the MSCI World Index which has gained 0.67% over the same period.
Final asset flow figures for February revealed that managers realised performance-based gains of US$26.8 billion while recording net asset inflows of US$31.4 billion as hedge funds continued to attract strong capital allocations from investors. Preliminary data for March shows that managers have posted performance-based losses of US$0.97 billion while net asset inflows for the month stand at US$8.09 billion, bringing the current AUM of the industry to US$2.07 trillion – the highest level on record.
Figure 1: Summary monthly asset flow data since January 2011
Key highlights for March 2014:
- Hedge funds up 0.87% in Q1 2014, with fund managers delivering performance-based gains of US$21 billion and recording net asset inflows of US$38 billion over this period – bringing the current AUM of the global hedge fund industry to US$2.07 trillion, a new record high.
- The Eurekahedge North America Hedge Fund Index was up 2.25% in the first quarter of 2014, outperforming the S&P 500 index which gained 1.30% over this period.
- Long/short equities funds record their 16th consecutive month of positive net asset flows, with net capital allocations to the strategy for Q1 2014 at US$38.5 billion and total assets in long/short equities hedge funds standing at US$704.6 billion – nearing close to their historical high of US$756 billion reached in December 2007.
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1Based on 47.06% of funds which have reported March 2014 returns as at 11 April 2014