Research

Asset Flows Update

Introduction

The Eurekahedge Hedge Fund Index was up 0.41% in July1 while underlying markets as represented by the MSCI World Index2 gained 2.59% over the same period. Regional mandates with the exception of underlying Asia focused hedge funds ended the month in the green. Asia focused strategies saw yet another month of decline as recovery in the US coupled with concerns over the US China trade war kept the pressure up on Asian markets. Across strategies, distressed debt and fixed income hedge funds led the table with gains of 0.76% each whilst CTA/managed futures hedge funds posted yet another month of losses.

Final asset flow figures for June 2018 revealed that managers reported performance-based losses of US$2.0 billion while recording net asset outflows of US$3.8 billion. Preliminary data for July shows that managers have posted performance-based gains of US$2.0 billion while recording net asset inflows of US$1.5 billion. This brings the current assets under management (AUM) of the global hedge fund industry to a total of US$2.46 trillion.

Figure 1a: Summary monthly asset flow data since January 2013
 

Key highlights for July 2018:

  • Hedge funds are up 0.43% for the year, their weakest performance on record since 2008 when they declined 0.23% in the seven months through to July. Almost 49% of managers are in the green for the year with roughly 13% of these managers posting double digit gains as tracked in the Eurekahedge Global Hedge Funds Database.
  • Total assets under management have increased by US$6.8 billion as of July 2018 year-to-date, down from US$126.7 billion over the same period last year as performance driven losses and subdued allocations from investors cap asset growth. For detailed asset flow breakdown across regions, strategies and fund size mandates click here.
  • With the exception of Asia, all major regional mandates are in the green for the year. Concerns over the US-China trade war have seen Asian mandates slip to the bottom of the league tables with the Eurekahedge Asian Hedge Fund Index down 1.61% for the year after posting gains of 17.1% in AY 2017.
  • Assets under management for CTAs/managed futures strategies have shrunk by almost 12% in 2018 - corresponding to a decline in AUM of US$30.7 billion in the first seven months of the year.
  • The CBOE Eurekahedge Short Volatility Hedge Fund Index gained 3.58% in July, kicking off the second half of the year with its best monthly performance since 2009. The index slumped 8.45% over the first half of 2018.
  • July was another month of losses for AI hedge fund managers, with the Eurekahedge AI Hedge Fund Index down 0.09% during the month. The index has posted four consecutive months of losses since April this year and is currently down 2.64% year-to-date.

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 database@eurekahedge.com to enquire on how to obtain the full research report.


Footnote
1 Based on 58.09% of funds which have reported July 2018 returns as at 16 August 2018
2 MSCI AC World Index (Local)
Chat