The Eurekahedge Hedge Fund Index gained 0.55% in April1 while underlying markets as represented by the MSCI World Index2 was up 1.18% over the same period. Among regional mandates, European managers posted the best gains, up 0.78% during the month followed by North American hedge funds which saw gains of 0.27%. Across strategies, distressed debt hedge funds led the table with gains of 1.12% followed by macro hedge funds with 0.84%.
Final asset flow figures for March 2018 revealed that managers reported performance-based losses of US$6.6 billion while recording net asset inflows of US$6.1 billion. Preliminary data for April shows that managers have posted performance-based gains of US$1.5 billion. Preliminary net asset flows were negative in April with US$3.4 billion of inflows from the industry. This brings the current assets under management (AUM) of the global hedge fund industry to a total of US$2.48 trillion.
Figure 1a: Summary monthly asset flow data since January 2013
Key highlights for April 2018:
- Hedge funds bounced back to positive territory in April, up 0.55% with the underlying markets, as represented by the MSCI AC World Index (Local) up 1.18% over the same period. On a year-to-date basis, managers gained 0.23% with 10% of them posting returns in excess of 5%.
- Total hedge fund assets grew by US$31.9 billion over the past four months, with US$36.2 billion attributed to investor inflows while managers posted performance-based losses of US$4.4 billion. Investors have been selective in their allocations across strategies with long/short equities and macro hedge funds seeing stronger subscriptions year-to-date.
- CTA/managed futures managers posted their third consecutive month of investor redemptions, totalling US$5.9 billion, bringing its year-to-date outflows to US$2.8 billion. Managers have posted performance-based losses of US$11.7 billion as of April 2018 year-to-date, the highest among all strategic mandates.
- All strategic mandates were up this month with the Eurekahedge Distressed Debt Hedge Fund Index posting the best returns, up 1.12% during the month – the only strategy to post four consecutive month of gains since the start of the year. Distressed debt managers saw investor redemptions of US$1.3 billion as of 2018 year-to-date while performance-based gains of US$0.8 billion were recorded.
- Asian hedge funds posted their third consecutive month of losses in April, down 0.12%. On a year-to-date basis, Asian managers lost 0.03%, with weaknesses led by Japan and India mandated hedge funds which were down 1.69% and 1.19% respectively.
- Asset base for the US$1.65 trillion North American hedge fund industry grew by US$18.4 billion over the year, with most of this growth attributed to investor allocations of US$22.1 billion year-to-date, while performance-based losses totalling US$3.7 billion were recorded.
- The Eurekahedge Crypto-Currency Hedge Fund Index rebounded to positive territory in April, up 45.43%, while its 2018 year-to-date figure is still in the red, down 21.87%. In contrast, bitcoin has lost over 26% over the same year-to-date period.
- While hedge funds with exposure into Latin America posted impressive returns this year, launch activity has been rather muted. Closures have outpaced launches annually from 2011 to 2018 year-to-date, with a total of 236 closures and 127 fund launches during this period. For more details, see the 2018 Key Trends in Latin American Hedge Funds report.
The full article is available in The Eurekahedge Report accessible to paying subscribers only.
Subscribers may continue to login as usual to download the full report and non-subscribers may email email@example.com to enquire on how to obtain the full research report.