Hedge funds ended June in positive territory with the Eurekahedge Hedge Fund Index up 1.25%1 and ended the second quarter of the year on a stronger note. On a year-to-date basis, hedge funds are up 3.00% while the MSCI World Index2 has returned 4.27% in the first half of 2014. Global markets were supported by accommodative monetary policies in June and steady gains in the US jobs market data, with the ECB initiating negative rates on bank deposits and indicating that unconventional monetary policy tools were still in reserve should the mild recovery in Eurozone falter.
Final asset flow figures for May revealed that managers raked in performance-based gains of US$16.7 billion while recording net asset inflows of US$6.8 billion as hedge funds continued to attract strong capital allocations from investors in 2014. Preliminary data for June shows that managers have posted performance-based gains of US$4.8 billion while recording net outflows of US$1.8 billion, bringing the current assets under management (AUM) of the industry to US$2.12 trillion – the highest level on record.
Figure 1: Summary monthly asset flow data since January 2011
Key highlights for June 2014:
- Despite mixed returns, hedge funds grew assets under management by US$105.6 billion in the first half of 2014 bringing the current AUM of the global hedge fund industry to a record high of US$2.12 trillion.
- Net flows into global hedge funds totalled US$65.3 billion in the first half of 2014, closely trailing the US$67.0 billion inflows during the same period last year. Eurekahedge North American Hedge Fund Index up 3.20% year-to-date.
- European hedge funds attracted US$31.3 billion in net asset flows in the first half of 2014, up from US$15.9 billion over the same period last year.
- North American managers posted performance-based gains of US$29.6 billion while recording net asset flows of US$31.4 billion as at June 2014 year-to-date.
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2 MSCI AC World Index (Local)