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Index Press Release - 8 July 2014


Hedge funds end Q2 on a strong note, up 3.18% year-to-date

Hedge funds finished the second quarter of the year on a stronger note with the Eurekahedge Hedge Fund Index up 1.45%1 in June. On a year-to-date basis, hedge funds are up 3.18% while the MSCI World Index2 has returned 4.27% in the first half of 2014.

Key takeaways for the month of June 2014:

  • Hedge funds were up 3.18% June year-to-date; 2.26% in the second quarter compared with 0.90% in Q1 2014.

  • Hedge funds posted performance-based gains of US$40 billion and attracted US$67 billion in net asset flows in the first half of 2014.

  • North American hedge funds lead the tables up 5.19% year-to-date - the highest among all regional mandates.

  • Long/short equities and event driven strategies delivered the best returns in June, up 1.96% and 1.80% respectively.

  • Latin American hedge funds posted their 5th consecutive month of positive returns, up 1.34% and 2.74% year-to-date.

  • Distressed debt hedge fund strategies were up 1.19% in June, posting their 12th consecutive month of gains, and are now up 5.11% in 1H 2014.

  • Japanese hedge funds surfaced in positive territory year-to-date after posting strong returns in June, up 2.09% during the month, and have outperformed the benchmark Nikkei 225 index by 7.26% year-to-date.

  • CTA/managed futures hedge funds were up for the third consecutive month, reporting gains of 1.67% in June and 2.63% year-to-date.

  • Macro hedge fund strategies continue to post lacklustre returns, up 0.24% in the first half of the year.
 

Main Indices

Main Eurekahedge Indices Jun
2014*
2014 Returns Q1 2014 Q2 2014* 2013 Returns
Hedge Fund Index 1.45 3.18 0.90 2.26 0.90
Fund of Funds Index 0.84 1.93 0.55 1.37 0.55
Long-Only Absolute Return Fund Index 1.55 4.89 0.77 4.09 0.77
Islamic Fund Index 0.60 5.29 3.10 2.13 3.10

 

Regional Indices

Eurekahedge Regional Indices Jun
2014*
2014 Returns Q1 2014 Q2 2014 2013 Returns
North American 2.49 5.19 1.84 3.30 1.84
European 0.35 2.34 1.51 0.81 1.51
Eastern Europe & Russia 2.65 -2.94 -8.71 6.32 -8.71
Japan 2.09 0.33 -1.89 2.27 -1.89
Emerging Markets 1.59 3.04 -0.62 3.67 -0.62
Asia ex-Japan 1.77 3.80 0.57 3.21 0.57
Latin American 1.34 2.74 -0.54 3.29 -0.54

Global markets were supported by accommodative monetary policies in June and steady gains in the US jobs market data, with the ECB initiating negative rates on bank deposits and indicating that unconventional monetary policy tools were still in reserve should the mild recovery in Eurozone falter. Meanwhile in Asia, China’s PMI data showed improvement in manufacturing activity while Indian equity markets continued to rally with the post election market euphoria still continuing unabated. In Japan, the GPIF has signalled a planned increased in its allocations to domestic equities, a move which is likely to see investors buy back into their bullish bets on the Nikkei.

All regional mandates ended the month in positive territory, with Eastern Europe and Russia focused hedge funds seeing the strongest gains; up 2.65% as underlying markets rallied, with the RTS gaining 5.43% during the month. North American fund managers were up 2.49% and lead the tables in terms of year-to-date returns with the Eurekahedge North American Hedge Fund Index gaining 5.19% in the first half of the year. Japan mandated hedge funds rebounded strongly in June, up 2.09% while the Nikkei 225 index gained 3.62%. Asia ex-Japan hedge funds were up 1.77%, with India focused managers driving the bulk of these gains. Greater China focused hedge funds produced their second consecutive month of positive returns, up 1.56% though they remain in the red on a year-to-date basis (down 1.38%). Latin American hedge funds reported their fifth consecutive month of positive returns, up 1.34% and 2.74% overall in the first half of 2014. European hedge funds trailed behind other regional mandates in terms of performance in June, up 0.35% - though outperforming underlying markets as the MSCI Europe Index declined 1.12% during the month.

 

Strategy Indices

All strategic mandates ended June on a positive note, with long/short equities, event driven and CTA/managed futures funds leading with gains of 1.96%, 1.80% and 1.67% respectively. Long/short equity funds were led by gains in India and Japan equity markets, with the former extending their May gains into June due to high hopes about the new government, while the latter was supported by high negative real interest rates and strong company earnings. CTA/managed futures hedge funds benefitted significantly from long positions in energy due to spikes in the price of oil as the situation in Iraq deteriorated. Meanwhile, the Eurekahedge Fixed Income Hedge Fund Index was up 0.60% in June, with a number of managers reporting gains from the rally in European fixed income. Hedge funds deploying relative value strategies reported the smallest gain of 0.37%, with gains in developed and emerging currency trading offsetting losses in fixed income trading.

 

Eurekahedge Strategy Indices Jun
2014*
2014 Returns Q1 2014 Q2 2014 2013 Returns
Arbitrage 0.61 2.48 1.17 1.29 1.17
CTA/Managed Futures 1.67 2.63 0.07 2.56 0.07
Distressed Debt 1.19 5.11 2.90 2.15 2.90
Event Driven 1.80 5.18 2.04 3.07 2.04
Fixed Income 0.60 3.98 1.74 2.21 1.74
Long/Short Equities 1.96 3.68 1.22 2.43 1.22
Macro 0.50 0.24 -0.39 0.62 -0.39
Multi-Strategy 1.15 3.42 0.63 2.77 0.63
Relative Value 0.37 2.58 1.50 1.06 1.50

 

Eurekahedge Global Hedge Fund Indices by Fund Size Jun
2014*
2014 Returns Q1 2014 Q2 2014 2013 Returns
Small (< US$100m) 1.64 3.31 0.82 2.47 8.02
Medium (US$100m - US$500m) 1.26 2.93 0.93 1.98 0.93
Large (> US$500m) 0.97 3.11 1.36 1.73 1.36
Billion Dollar 0.63 2.40 1.09 1.30 1.09

 

Mizuho-Eurekahedge Indices Jun
2014*
2014 Returns Q1 2014 Q2 2014 2013 Returns
Mizuho-Eurekahedge Index - USD 1.06 2.83 1.01 1.80 1.01
TOP 100 Index - USD 0.75 2.57 0.94 1.61 0.94
TOP 300 Index - USD 0.95 2.79 1.06 1.71 1.06

 

Asia-Eurekahedge Indices Jun
2014*
2014 Returns Q1 2014 Q2 2014 2013 Returns
Greater China 1.56 -1.38 -2.41 1.06 -2.41
India 9.04 30.09 6.80 21.80 6.80

* Based on 28.36% of funds which have reported June 2014 returns as at 8 July 2014


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Footnotes

1 Based on 28.36% of funds which have reported June 2014 returns as at 8 July 2014
2MSCI AC World Index (Local)

 

 


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