The Eurekahedge Hedge Fund Index was down 0.06% in September1 while underlying markets as represented by the MSCI World Index2 gained 0.07% over the same period. Asia focused strategies saw yet another month of decline as recovery in the US coupled with concerns over the US China trade war kept the pressure up on Asian markets with underlying Greater China mandates suffering steep losses. Across strategies, distressed debt, fixed income and arbitrage hedge funds led the table with gains of 1.84%, 0.70% and 0.29% respectively.
Final asset flow figures for August 2018 revealed that managers reported performance-based losses of US$2.3 billion while recording net asset outflows of US$4.3 billion. Preliminary data for September shows that managers have posted performance-based gains of US$5.2 billion while recording net asset outflows of US$4.1 billion. This brings the current assets under management (AUM) of the global hedge fund industry to US$2.45 trillion.
Figure 1a: Summary monthly asset flow data since January 2013
Key highlights for September 2018:
- Hedge funds were up 0.26% for the year, their weakest performance on record since 2011 when they declined -2.96% in the nine months through to September. Almost 49% of the managers are in the green for the year with roughly 11% of these managers posting double digit gains as tracked in the Eurekahedge Global Hedge Funds Database.
- Total assets under management have increased by US$8.0 billion as of September 2018 year-to-date, down from US$150.7 billion over the same period last year as performance-driven losses and subdued allocations from investors cap asset growth. Barring January earlier this year, investors have redeemed US$31.4 billion from hedge funds globally through to September. For detailed asset flow breakdown across regions, strategies and fund size mandates click here.
- Emerging markets focused mandates are in the red for the year down 3.43% YTD, with Asian managers down 4.05% for the year and the underlying Eurekahedge Greater China Hedge Fund Index posting losses of 8.16% as of September 2018.
- Across strategies, distressed debt, relative value and fixed income hedge funds lead for the year up 8.63%, 3.37% and 1.66% respectively.
- Assets under management for CTAs/managed futures strategies have shrunk by almost 8% in 2018 - corresponding to a decline in AUM of US$21.3 billion in the first eight months of the year. Meanwhile multi-strategy hedge funds have recorded the steepest redemptions for the year totalling US$19.4 billion.
- Across both equities and fixed income assets, North American hedge fund managers remain the bright spot with underlying long/short equity managers up 5.74% whilst fixed income focused mandates have gained 5.35% as of September 2018 year-to-date. In contrast, emerging markets focused equity long/short managers are down 6.32% while fixed income mandates have lost 1.56% for the year.
- The Eurekahedge Crypto-Currency Hedge Fund Index is down 54.5% for the year. The index has lost more than half of its value over the first nine months of 2018, as fund managers struggled to mitigate the damage caused by the crypto-currency market crash following gains of 1708.5% in 2017.
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