Research

Asset Flows Update

Introduction

Hedge fund returns were up for the third consecutive month as markets remained upbeat following encouraging job creation data from the US, with Janet Yellen’s dovish sentiments regarding the short-term continuation of the Fed’s QE program giving a further leg up to investor sentiment. The Eurekahedge Hedge Fund Index was up 1.31%1 during the month, bringing its year-to-date (YTD) return to 7.34%. The MSCI World Index gained 1.27%2 during the month.

The industry witnessed strong growth in assets under management (AUM) during the months of September and October, with total assets rising sharply on the back of strong performance-based gains and net inflows from investors –  registering a cumulative increase in AUM of US$81.2 billion. November saw some interesting results, although managers delivered their third consecutive month of performance-based gains (US$2.51 billion), net inflows were in the red with the industry shedding US$3.96 billion during the month. The total AUM of the industry currently stands at US$1.99 trillion – the highest level on record and set to breach the US$2 trillion mark by the end of 2013.

Figure 1: Summary monthly asset flow data since January 2011

Key highlights for November 2013:

  • Total assets in the hedge fund industry reached a new record high of US$1.99 trillion, increasing by US$213 billion during the year

  • Of this increase, US$127 billion was raised through net asset flows whereas US$86 billion accrued through performance-based gains

  • European fund managers are up 7.42% November YTD with net asset inflows for the year standing at US$53.6 billion, the highest level on record


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Footnote

1Based on 43.11% of funds which have reported November 2013 returns as at 11 December 2013

2 The MSCI AC World Index All Core (USD)

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