Hedge Fund Performance Commentary


Hedge funds were up 0.32%1 during the month of November, with 2017 year-to-date returns coming in at 7.27%. Meanwhile, underlying markets as represented by the MSCI AC World Index (Local) gained 1.16% in November with its 2017 year-to-date returns coming in at 16.17%. Roughly 76% of underlying constituent funds for the Eurekahedge Hedge Fund Index were in positive territory this month, with majority of them being long/short equities mandated. Equity markets continued to perform well this month with strength led by US and emerging Asian markets. Encouraging macroeconomic data from US and Japan buoyed market sentiment with growth in manufacturing activity adding to much optimism. On the other hand, subdued inflation figures, the failure in German coalition talks and a strengthening euro weigh on European equity markets which ended November in the red. Meanwhile early estimates put hedge fund returns in positive territory at 0.36% for the month of December. Barring any major event materialising for the rest of the month this should see the global hedge fund industry ending 2017 with gains of 7.81% - 322 basis points higher in comparison to annual gains for 2016.

Returns were mixed across the board of regional mandates with Asia ex-Japan hedge fund managers delivering the best returns, up 1.53% over the month, followed by Japan and North American mandated hedge funds with gains of 1.06% and 0.86% respectively. On the other hand, Latin American mandated hedge funds posted the steepest decline in November, down 1.30%, followed by European mandated hedge funds with losses of 0.47%. On a year to-date basis, Asia ex-Japan hedge fund managers led the table up 19.89% followed by their Japanese and Latin American counterparts gaining 12.24% each.

Figure 1: November 2017 and October 2017 returns across regions


Performance was a mixed bag across regional mandates with Asian hedge funds in the lead this month. Asia ex-Japan hedge fund managers posted the best gains, up 1.53%, their eleventh consecutive month of gains which brings their year-to-date returns at 19.89%. Japan mandated hedge funds were also up 1.06%, as Japanese equity markets ended the month in positive territory with the Nikkei 225 Index up 3.24% despite strong JPY/USD during the month.  Among developed market mandated funds, the Eurekahedge North America Hedge Fund Index posted gains of 0.86% while European managers languished into negative territory, down 0.47% with the MSCI AC Europe Local Index declining 1.80% during the month. The Eurekahedge Latin American Hedge Funds Index also posted losses of 1.30% in November.

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1 Based on 48.05% of funds which have reported November 2017 returns as at 13 December 2017