The Eurekahedge Hedge Fund Index declined 0.31%1 in October, trailing the global equity market which edged 1.93% higher over the month, as represented by the MSCI ACWI (Local). Global equities rallied throughout the month, supported by the continuation of the US-China trade talks which culminated in a partial trade agreement between the two countries. The bond market saw yields climb as the risk-on sentiment returned to the equity market and the Fed signalled that they are done with rate cuts for the moment. Returns were positive across regions, with Asia ex-Japan mandate returning 2.36% for the month. On a year-to-date basis, fund managers focusing on Asia ex-Japan were up 9.74% over the first 10 months of the year, outperforming their North American peers who returned 6.26% over the same period.
Final asset flow figures for September showed that hedge fund managers recorded performance-based gains totalling US$9.8 billion, as well as investor redemptions totalling US$12.5 billion throughout the month. Preliminary data for October revealed that the global hedge fund industry witnessed US$2.8 billion of performance-driven gains and US$0.1 billion of net investor inflows. The assets under management (AUM) of the global hedge fund industry stood at US$2,272.8 billion as of October 2019. On a year-to-date basis, the industry has seen US$107.5 billion of performance growth and US$126.9 billion of investor redemptions over the first 10 months of 2019.
Figure 1a: Summary monthly asset flow data since January 2013
Key highlights for October 2019:
- The Eurekahedge Hedge Fund Index was up 0.31% in October, bringing its year-to-date return to 6.27%. Roughly 30.1% of the hedge fund managers comprising the index have recorded double-digit gains over the first 10 months of the year.
- The global hedge fund industry AUM has declined by US$19.5 billion as of October 2019 year-to-date. Net outflows figure for Q3 stood at US$40.6 billion, which compares to the US$46.4 billion and US$40.0 billion of net outflows in Q1 and Q2 2019 respectively.
- The Eurekahedge North American Hedge Fund Index was up 6.26% year-to-date, as fund managers focusing on the region benefited from the equity market rally throughout the first 10 months of the year. The S&P 500 has gained 21.17% as of October 2019 year-to-date, while the tech-heavy NASDAQ Composite was up 24.97% over the same period. North American hedge fund managers have recorded US$76.5 billion of performance growth year-to-date.
- The Eurekahedge Greater China Hedge Fund Index rallied 3.70% in October on the back of the progress in US-China trade negotiations, pushing its year-to-date return to 11.82%. The US$29.1 billion mandate has seen US$1.5 billion of performance growth, offset by US$0.4 billion of investor redemptions year-to-date.
- The Eurekahedge CTA/Managed Futures Hedge Fund Index was down 1.11% in October, as weak macroeconomic data in China raised concerns regarding global oil demand. Preliminary data showed that CTA/managed futures fund managers have generated US$13.9 billion of performance growth year-to-date, offset by investor redemptions totalling US$11.1 billion. This contrasts with how the mandate saw its AUM base decline by US$45.5 billion throughout 2018.
- Hedge fund managers utilising fixed income strategies ended the month of October up 0.44% despite the rally in bond yields throughout the month. On a year-to-date basis, the Eurekahedge Fixed Income Hedge Fund Index has returned 6.43%.
- The Eurekahedge ILS Advisers Index gained 1.17% in October, pushing its year-to-date return to 1.97%. Despite being a calm period of insurance losses, the first half of 2019 had seen ILS hedge fund managers crippled by loss creep from past events.
- The Eurekahedge Crypto-Currency Hedge Fund Index was up 8.84% in October as Bitcoin price rallied 14.09% during the month. On a year-to-date basis, crypto hedge fund managers have returned 37.62% over the first 10 months of 2019.
The full article is available in The Eurekahedge Report accessible to paying subscribers only.
Subscribers may continue to login as usual to download the full report and non-subscribers may email email@example.com to enquire on how to obtain the full research report.