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June 2010 Asset Flows Update

Introduction

Hedge fund returns were slightly negative in June as world markets continued to slide for the second straight month. The Eurekahedge Hedge Funds Index was down 0.59%1 in the month that saw high volatility in all asset classes. However, the trend of outperforming the underlying markets persisted as the MSCI World Index declined 3.56% during the month.

June also witnessed marginally positive net flows of US$0.4 billion in addition to performance-based gains of US$0.2 billion. However, following the heavy losses in May, the total size of the industry is now back down to US$1.51 billion as at end-June.

The year-to-date performance figure for hedge funds slipped into negative territory in June, with the Eurekahedge Hedge Fund Index down 0.12% YTD. However, this still represents an outperformance to the global markets which are down 10.88% June YTD (MSCI World Index).

Figure 1 shows the monthly asset flows across the hedge fund industry since December 2008.

Figure 1: Summary Monthly Asset Flow Data since December 2008

Below are the highlights for the month of June:

  • Hedge funds remained flat June year-to-date (-0.12%) while outperforming global markets by more than 10.5%.
  • Strong launch activity was seen in 1H2010 – more than 500 launches globally.
  • UCITS III hedge fund assets crossed US$100 billion during 1H2010.  
  • SRI funds outperformed global markets in the last 12 months (1.33%) as well as 2010 YTD (4.21%).

In terms of regional mandates, European managers attracted the most capital…

The full article is available in the EH Report accessible to paying subscribers only.

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Footnote

1Based on 71.84% of the funds reporting the NAV for June 2010 as at 19 July 2010.