The benchmark Eurekahedge Hedge Fund Index was down 2.27% in October, down 2.15% year-to-date. Total assets under management decreased by US$38.5 billion during the month as the sector witnessed a performance-based decrease of US$20.7 billion while registering net asset outflows of US$17.9 billion. The total size of the industry now stands at US$2.41 trillion.
The Eurekahedge Hedge Fund Index was down 2.27% in October while underlying markets as represented by the MSCI World Index declined 7.33% over the same period. Concerns over rising interest rates in the US coupled with the prospects of political indecisiveness and turmoil in Washington following the Democrat’s House win saw US markets trade lower and give back their gains for the year.
The Eurekahedge Hedge Fund Index declined 2.27%, throughout the volatile month of October, dragging its year-to-date decline to 2.15% in what turned out to be the worst month for the global hedge fund industry since 2011. Despite the carnage in the global equity markets, the majority of the hedge fund managers tracked by Eurekahedge outperformed the underlying market as represented by the MSCI ACWI AC (Local), which slumped 7.33% during the month.
The year 2018 might not have been the best year for the hedge fund industry, with the return of market volatilities in the first quarter and the immediately following global trade friction between the world’s two strongest economies. The equal-weighted Eurekahedge Hedge Fund Index was up 0.12% as of September 2018 year-to-date, as fund managers struggled to generate profits amidst the volatile market and difficult trading situation throughout the year. The industry has also seen multiple liquidations of high-profile hedge funds overseeing billions of dollars of assets, as they were incapable of generating returns beyond what the fund managers and investors deem acceptable.
The Eurekahedge Latin American Hedge Fund Index was up 2.14% as of September 2018 year-to-date, ahead of the MSCI EM Latin America IMI Index which declined 0.19% over the same period. The markets showed optimism on the outcome of the recent Brazilian election, as it entails the economic policy framework for the next four years. Brazil’s economy is currently undergoing an economic recovery from its deep recession between 2014 and 2016, which was caused by declining commodity prices and political concerns. As a result, Brazil was the only geographic mandate in the region that were in the positive territory, gaining 3.70% year-to-date.
Emerging market mandated hedge funds were down 3.96% year-to-date, as they struggled to mitigate the losses suffered from underlying equity markets, as represented by the 5.27% loss posted by the MSCI Emerging Market IMI Index (Local). The Eurekahedge Emerging Markets Hedge Fund Index was down in seven months throughout the first three quarters of 2018, marking it as one of the worst years for emerging market hedge funds since 2011.
Eurekahedge’s Latin American hedge funds infographic sums up the industry as at November 2018. Find out more about Latin American 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.
On 18 October, the Houses of the Oireachtas (the Irish Parliament) approved legislation (SI No 388/2018) increasing substantially the financial thresholds at and above which mandatory notification of a transaction is required to the Competition and Consumer Protection Commission (CCPC) in Ireland. From 1 January 2019, only mergers where the acquirer and target each generate €10 million (or more) and together generate €60 million (or more) of turnover in Ireland will trigger mandatory notification.