Research

Hedge Fund Performance Commentary

Introduction

The Eurekahedge Hedge Fund Index ended the month of July up 0.41%1 as North American and European equity markets enjoyed the boost from strong second quarter earnings season, which somewhat mitigated losses incurred by the global trade friction. Roughly 13% of hedge fund managers tracked by Eurekahedge managed to outperform the underlying global equity markets as represented by the MSCI AC World Index (Local) which gained 2.59% over the month. On a year-to-date basis, the Eurekahedge Hedge Fund Index was up 0.43% as of July 2018.

Across geographic mandates, Latin American hedge fund managers led the pack with their 3.06% gains in July, followed by their North American peers which returned 1.17% on average. Easing political concerns in Brazil and Mexico helped their equity markets recover. In contrast, the Eurekahedge Asia ex Japan Hedge Fund Index ended the month in the red, slumping 0.66% under the pressure of declining oil and metal prices, as well as the US-China trade spat which took their toll on the equity markets of export-heavy countries. Over in Europe, major equity indices edged higher throughout the month, following the ECB’s decision to hold their rates and continue their quantitative easing policies. The Eurekahedge European Hedge Fund Index gained 0.44% over the month.

Figure 1: June 2018 and July 2018 returns across regions
 

On a year-to-date basis, Latin American fund managers were up 3.89%, replacing North American fund managers at the top of the charts. Meanwhile, the Eurekahedge Japan Hedge Fund Index, which tracks hedge fund managers investing exclusively in Japan, was down 2.19% as of July 2018 year-to-date as the positive returns generated last month was not enough to offset losses incurred within the prior five consecutive months. Among the constituents of the Eurekahedge Hedge Fund Index, 8.31% of the fund managers were able to generate double-digit year-to-date returns.

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Footnote
1 Based on 58.09% of funds which have reported July 2018 returns as at 16 August 2018.

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