Asset Flows Update

The Eurekahedge Hedge Fund Index was down 0.87%1 in November as hedge funds provided significant downturn protection in a month marked by large declines and trend reversals. The MSCI World Index fell by nearly 10% during the course of the month and closed 3.22% lower at the end. Hedge funds also witnessed another month of net negative asset flows, with investors withdrawing more than US$9 billion in November.

The total size of the industry declined by nearly US$10 billion; with performance-based losses accounting for US$0.5 billion and net outflows of US$9.4 billion made up for the rest. Eroding investor sentiment in the second half of the year has started to take its toll on the hedge fund sector with November being the fourth consecutive month of negative asset flows for the sector. Total size of the industry now stands at US$1730 billion, a decrease of more than US$90 billion since July, with net redemptions accounting for US$52 billion.

Figure 1: Summary monthly asset flow data since December 2008

Key highlights for the month of November:

  • The Mizuho-Eurekahedge Top 100 Index remained in the black November YTD, up 2.12%
  • European hedge funds saw seven months of net negative asset flows - US$30 billion ...

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1Based on 57.94% of funds which have reported November 2011 returns as at 15 December 2011