Hedge funds posted slightly negative returns in August, amid increasing risk aversion in the markets. The Eurekahedge Hedge Fund Index was down 0.23%1 during the month as global markets reverted to ‘risk-off’ mode amid fears of another war in the Middle East and speculation that the US Federal Reserve will slow down its asset purchase program. The MSCI World Index was down by 2.26 %2 during the month.
Total assets under management (AUM) declined by US$6.3 billion during the month, bringing the size of the industry to US$1.90 trillion. Most of the negative impact on total assets came from negative performance in August as managers lost US$4.7 billion over the course of the month. The industry also witnessed net negative asset flows of US$1.62 billion during the month.
Figure 1: Summary monthly asset flow data since January 2011
Key highlights for August 2013:
- Global hedge fund AUM declined by US$6.3 billion in August1
- Launch activity picks up pace in 2013 with more than 500 funds launched globally July 2013 year-to-date
- Asia ex-Japan hedge funds outperformed underlying markets by 10% August year-to-date
- Assets in long/short equity hedge funds crossed the US$600 billion mark for the first time since 2008
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1Based on 45.07% of funds which have reported August 2013 returns as at 12 September 2013
2The MSCI AC World Index All Core – USD