Asset Flows Update

Hedge funds witnessed a month of healthy returns and positive asset flows in September as the prevailing sentiment remained in the risk-on mode. The Eurekahedge Hedge Fund Index was up 0.96%1 during the month while most underlying markets witnessed rallies on the back of monetary easing announcements by the ECB and the US Federal Reserve. The MSCI World Index was up by 2.29%2 during the month.

Total assets under management (AUM) increased by US$8.1 billion during the month, bringing the size of the industry to US$1.76 trillion. Hedge funds posted performance-based gains of US$5.1 billion as most strategies were profitable. The industry also witnessed net positive asset flows for the second consecutive month as investors allocated a further US$2.9 billion to the industry.

Figure 1: Summary monthly asset flow data since January 2010

Key highlights for September 2012:

  • Hedge funds have now witnessed three consecutive months of positive returns and the industry has gained 2.59% in 3Q 2012.
  • The Eurekahedge Hedge Fund Index is up 4.20% year-to-date with over 1,000 funds up more than 10% and 500 funds up more than 15%.
  • Asia ex-Japan managers gained 3.69% in September with Indian hedge funds delivering the best returns of 8.02%.

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1 Based on 31.24% of funds which have reported September 2012 returns as at 9 October 2012

2The The MSCI AC World Index All Core – Local Currency