Hedge funds delivered their third consecutive month of positive returns as global markets maintained their upward momentum. The Eurekahedge Hedge Fund Index was up 1.31%1 during the month, edging past the MSCI World Index2 which gained 1.27% in November.
Global markets remained upbeat on the back of positive macroeconomic data from the US, with incoming Fed chair Janet Yellen’s testimony before the Senate’s Banking Committee adding a further dose of optimism to the markets as she reiterated the necessity of the Fed’s QE program for an enduring recovery in the US economy. Meanwhile, European markets were supported by the ECB’s cut in its interest rates to 0.25% - the lowest on record, as fears surfaced over the prospects of a deflationary spiral in the eurozone region. Asian markets edged upwards on the back of strong third quarter GDP estimates from China, with markets reacting positively as details emerged regarding the CCP’s third plenary session.
Figure 1: October and November 2013 returns across regions
All major hedge fund investment regions witnessed positive returns during the month. The Eurekahedge Asia ex Japan Hedge Fund Index saw the strongest gains among all regional mandates – up 1.85%, outperforming the MSCI Asia ex-Japan Index3 which was down 0.05% in November. Japanese fund managers posted yet another month of positive returns, up 1.33% as the Nikkei 225 Index climbed 9.31% during the month, helped by a fall in the value of the yen relative to the dollar.
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1 Based on 43.11% of funds which have reported November 2013 returns as at 11 December 2013
2 MSCI AC Asia ex Japan Index (Local)
3 MSCI AC World Index (USD)