After growing consistently for six months, hedge fund assets under management declined by US$2.85 billion in January 2010 as global markets went through some mid-month volatility. The Eurekahedge Hedge Fund Index was down by 0.86%1; however, this can be considered as an outperformance as most market indices registered declines ranging from 3% to 9%. The MSCI World Index was down 4.2% amid concerns over the global economy and health of the financial sector.
The decrease in assets under management came mainly from performance-based losses while asset flows remained flat to slightly positive for the month across the industry. Mid-month reversals in market trends left some managers facing negative performances for January which resulted in net losses of US$3 billion. The market volatility also caused a spike in risk aversion, leading investors to hold off their allocations; however, the net flow of assets was slightly positive for the month with net subscriptions of US$0.1 billion.
Figure 1 shows the monthly asset flows across the hedge fund industry since the end of 2007.
Figure 1: Summary Monthly Asset Flow Data for 2009
Below are the highlights for the month of January:
- Hedge funds outperformed underlying markets in January 2010, losing 0.86% while global markets were down 3% to 9%.
- Latin American hedge funds witnessed 15 straight months of back-to-back gains, up 29.38% since October 2008; European investing hedge funds posted...
The full article is available in the EH Report accessible to paying subscribers only.
Subscribers may continue to login as usual to download the full report and non-subscribers may email firstname.lastname@example.org to enquire on how to obtain the full research report.
1Based on 79.78% of the funds reporting their January 2010 performances as at 23 February 2010.