The benchmark Eurekahedge Hedge Fund Index was up 0.09% in August, up 0.45% year-to-date. Total assets under management decreased by US$6.2 billion during the month as the sector witnessed a performance-based decrease of US$3.7 billion while registering net asset outflows of US$2.5 billion. The total size of the industry now stands at US$2.45 trillion.
The Eurekahedge Hedge Fund Index was up a flat 0.09% in August while underlying markets as represented by the MSCI World Index gained 1.06% 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, CTA/managed futures and relative value hedge funds led the table with gains of 1.52%, 1.05% and 0.58% respectively.
The Eurekahedge Hedge Fund Index ended the month almost flat, gaining 0.09% with gains posted by North American mandated funds offset by losses suffered by managers focusing on Europe, Asia and Latin America. Roughly 28% of the hedge fund managers tracked by Eurekahedge managed to outperform the underlying global equity markets as represented by the MSCI AC World Index (Local) which gained 1.06% over the month. On a year-to-date basis, the Eurekahedge Hedge Fund Index was up 0.45% as of August 2018, with 10% of the constituent funds generating double-digit returns over the first eight months of the year.
Crypto-currency funds dominated the hedge fund performance league tables back in 2017, thanks largely in part to the gravity defying price of Bitcoin (BTC), Ethereum (ETH), and other major crypto-currencies. The Eurekahedge Crypto-Currency Hedge Fund Index returned 1708.50% throughout the year, outperforming the global hedge fund industry average performance by over two hundredfold. While opinions around the future of crypto-currency became increasingly polarized, the enviable price appreciation continued to attract actively managed funds investing in crypto-currencies.
The Eurekahedge Asian Hedge Fund Index was down 1.57% year-to-date, and ended up as the only major regional mandate within the Eurekahedge database that was in negative territory over the first seven months of 2018. Asian hedge funds traded under the pressure of the escalating US-China trade war. The United States president Donald Trump officially fired the first shot in the trade war by imposing a 25% tariff to US$34 billion of imported Chinese goods on July 6, 2018 in response to China’s alleged unfair trade practices. The move resulted in China’s retaliatory tariff of the same magnitude on the US agriculture products, which took effect on the same date. After the first tranche of the US and China trade tariffs, the US president proposed another 25% tariff on US$200 billion of imports and further escalated the trade friction between the two largest economies in the world. China’s two mainland stock exchanges continued to slump since the beginning of the year as the impact of the tari
Eurekahedge’s Asian hedge funds infographic sums up the industry as at September 2018. Find out more about global hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.
Securitisation is the issuance of tradable financial instruments backed by one or a group of assets. Through securitisation, assets receive an additional layer of accessibility in the financial markets, allowing for the funding of an investment strategy, or for financing based on creditworthiness, cash flows, and/or collateral of an organisation. The result of securitisation is a tradable financial instrument that can be purchased globally through brokerage accounts.
To help guide Taiwanese businesses and financial institutions, here are highlights of financing trends we are observing these days in the Asia-Pacific region.
While retail funds must be authorized by the Securities and Futures Commission (“SFC”) before distribution in Hong Kong, the SFC has no authority to regulate private funds. Unable to touch these funds directly, the SFC has instead imposed new regulatory requirements on licensed asset managers, financial advisers and fund distributors, through amendments to the Fund Manager Code of Conduct (“FMCC”) and the Code of Conduct for Persons Licensed by or Registered with the SFC (“Code of Conduct”).
In the past year, the U.S. Securities Exchange Commission (SEC) and Chairman Jay Clayton have repeatedly cautioned the cryptocurrency and initial coin offering (ICO) industries about the securities law implications for digital assets. On February 6, 2018, in testimony before the Senate Banking Committee, Chairman Clayton notably asserted that “[e]very ICO I’ve seen is ‘a security.’”
Sponsors who wish to establish investment funds in Hong Kong will soon have the choice of a new investment structure, the open-ended fund company (OFC). The introduction of the OFC is designed to boost Hong Kong’s development as a fund manufacturing hub. It is part of the Hong Kong government’s commitment to enhance Hong Kong as an asset management centre.
The State Duma, the lower chamber of the Russian parliament, has recently approved in the ‘first reading’ three draft laws that address the use of cryptocurrencies, mining, token offerings, and crowdfunding. Existing Russian laws do not directly regulate these matters, and the use of cryptocurrency in Russia is currently subject to legal uncertainty. This LawFlash summarises key provisions of the draft laws as well as information on likely future legislative action.
We’re half way through 2018 and it’s been a busy six months in the regulatory space for asset managers. This briefing outlines a number of key developments at both domestic and EU level, regarding, regulatory returns, CP86, anti-money laundering, corporate governance, remuneration, depositaries and cross-border distribution of collective investment funds.