Asset Flow Update

Global hedge funds were down for the second month running as the Eurekahedge Hedge Fund Index declined 1.22%1 in June and was flat to slightly positive for the first half of 2011. Comparatively, the MSCI AC World Index2 was down 1.88% in June and up 1.05% year to date (YTD).

Total assets under management (AuM) were down by US$8.8 billion, although the sector continued to attract capital for the seventh consecutive month. Mid-month trend reversals in June led to losses across the spectrum of different strategies, as managers found it difficult to navigate through unpredictable market conditions. The total assets gained through performance stand at a modest US$20 billion for 1H 2011.

On the other hand, hedge fund asset flows were positive in June, with managers attracting net inflows of US$2.6 billion. Allocation activity has remained high throughout 1H 2011 with the sector attracting US$116.2 billion in the last six months – the strongest half-yearly asset flows on record.

Figure 1: Summary monthly asset flow data since December 2008

Key highlights for the month of June:

  • Hedge funds outperform underlying markets in 2nd quarter by 0.78% but remain flat YTD (+0.33%)

  • All strategies delivered negative returns for only the fourth time in the last ten years

  • Net asset flows remained positive for the seventh consecutive month – US$2.6 billion
  • Net asset flows for 1H 2011 stand at US$116.2 billion, the strongest first six months on record.


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1Based on 66.03% of funds which have reported June 2011 returns as at 18 July 2011

2MSCI AC World Index All Core – Local