The Eurekahedge Hedge Fund Index gained 0.62%1 in July, with positive returns across geographic mandates. Investor optimism towards the resumption of the US-China trade talks combined with the Fed’s anticipated rate cut boosted the US equity market to a new all-time high. Meanwhile in Asia, Asia ex-Japan hedge funds managed to record positive returns of 0.73% over the month. Despite the ongoing protests in Hong Kong and the trade dispute between Japan and South Korea, Asia ex-Japan hedge funds outperformed their North American peers who gained 0.32% over the same period. Roughly 33.7% of the hedge fund managers tracked by the Eurekahedge Global Hedge Fund Database were able to generate positive returns during the month.
Final asset flow figures for June showed that hedge fund managers’ recorded performance-based gains totalling US$23.7 billion counterbalanced by investor redemptions of US$22.5 billion throughout the month. Preliminary data for July revealed that the global hedge fund industry witnessed US$18.1 billion of performance-driven gains, offset by US$12.1 billion of net investor outflows. The assets under management (AUM) of the global hedge fund industry stood at US$2,292.4 billion as of July 2019. On a year-to-date basis, the industry has seen US$98.6 billion of performance growth and US$98.5 billion of investor redemptions over the first seven months of 2019.
Figure 1a: Summary monthly asset flow data since January 2013
- The Eurekahedge Hedge Fund Index was up 0.62% in July, bringing its year-to-date return to 6.48%. Roughly 30.8% of hedge fund managers in the index have recorded double-digit gains over the first seven months of the year.
- The global hedge fund industry AUM remained mostly flat as of July 2019 year-to-date. Final Q2 2019 net outflows figure stood at US$40.0 billion, as investor redemptions continued to slow down. Hedge fund managers recorded US$46.4 billion and US$94.7 billion of net outflows in Q1 2019 and Q4 2018 respectively.
- The Eurekahedge North American Hedge Fund Index was up 6.90% year-to-date, as fund managers focusing on the region benefited from the equity market rally throughout the first seven months of the year. The S&P 500 has gained 18.89% over the first seven months of 2019, while the tech-heavy NASDAQ Composite was up 23.21% over the same period. North American hedge fund managers have recorded US$68.6 billion of performance growth year-to-date.
- The Eurekahedge Greater China Hedge Fund Index gained 0.51% in July, bringing its year-to-date gain to 10.37%. Investor confidence in the US$28.4 billion mandate remained robust with US$0.9 billion of net inflows recorded in 2018, despite the US$2.3 billion performance decline over the same year.
- The Eurekahedge CTA/Managed Futures Hedge Fund Index was up 1.44% in July, with mixed returns among its underlying regional mandates. Long exposure to precious metals acted as a performance contributor for CTA/managed futures hedge funds during the month. Preliminary data showed that the mandate saw US$2.3 billion of net outflows in July.
- Hedge fund managers utilising fixed income strategies ended the month of July up 0.47% on the back of strong government and corporate bond markets. Dovish remarks from the Fed and ECB leaders drove the US 10-year bond yield to its lowest level since 2016, as well as the German 10-year bond yield to a record low. On a year-to-date basis, the Eurekahedge Fixed Income Hedge Fund Index has returned 5.50%.
- The Eurekahedge ILS Advisers Index was up 0.64% in July, bringing its year-to-date loss to 0.49%. Despite being a calm period of insurance losses, the first half of 2019 has seen ILS hedge fund managers crippled by loss creep from past events.
- The Eurekahedge Crypto-Currency Hedge Fund Index slumped 5.88% in July, ending their five-month winning streak. Crypto hedge fund managers benefited from the rally in crypto assets which saw Bitcoin breaching the US$12,000 level for the first time since the Q1 2018 crash. The index is still up 76.49% over the first seven months of 2019.
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