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Index Press Release - 07 February 2013

Hedge funds start the year with positive returns of 1.98%

Hedge funds posted excellent returns in January on the back of rising risk appetite and rallying equity markets globally. The Eurekahedge Hedge Fund Index was up 1.98%¹ during the month, while the MSCI World Index² gained 4.66%.

Key takeaways for the month of January 2013:

80% of hedge funds reported positive performance in January, compared to the 2012 monthly average of 60%
Asia ex-Japan and Eastern Europe & Russia hedge funds outperformed underlying markets, up by 5.03% and 7.67% respectively
Distressed debt hedge funds gained 3.47% in January; delivering the strongest results among the various strategies for 6 consecutive months with gains of 14% over this period
Japanese hedge funds witnessed the strongest January return on record
Relative value funds continued their winning streak into the 8th month with gains of 1.12% in January
The asset-weighted Mizuho-Eurekahedge Asia ex-Japan Long Short Equities Index was up 4.64% during the month
CTA/managed futures funds gained 1.69% in January – more than their annual 2012 return

Main Indices

Main Indices	January 2013*	2012 Returns	2011 Returns
Eurekahedge Hedge Fund Index	1.98	6.21	-3.01
Eurekahedge Fund of Funds Index	2.34	4.08	-5.33
Eurekahedge (Long-Only) Absolute Return Fund Index	3.89	15.65	-13.89
Eurekahedge Islamic Fund Index	0.58	7.34	-3.49

Regional Indices

Regional Indices	January 2012*	2012 Returns	2011 Returns
Eurekahedge North American Hedge Fund Index	2.19	7.47	0.231
Eurekahedge European Hedge Fund Index	1.99	7.05	-6.00
Eurekahedge Eastern Europe & Russia Hedge Fund Index	7.67	6.77	-20.55
Eurekahedge Japan Hedge Fund Index	4.09	6.14	-1.35
Eurekahedge Emerging Markets Hedge Fund Index	1.79	10.95	-8.16
Eurekahedge Asia ex-Japan Hedge Fund Index	5.03	11.95	-12.20
Eurekahedge Latin American Hedge Fund Index	1.29	10.55	1.92

Taking the cue from performance end-December, markets continued their upward trajectory through January. Markets started trending after US leaders reached an agreement to avert the 'fiscal cliff' and were further supported by positive macro-economic data. Concerns of a global slowdown waned in the wake of upbeat news from Europe, the US and China while corporate earnings added greater impetus to the rallies.

Hedge funds across all regions posted positive returns for the month with Emerging Europe and Asian hedge funds leading the way. The Eurekahedge Eastern Europe & Russia Hedge Fund Index was up 7.67%, with funds that had exposure to the power and utilities sectors posting double-digit gains. These returns point to substantial outperformance as the RTS Stock Index gained 5.99% while the MSCI Eastern Europe Index³ was up 2.95%.

Asia ex-Japan funds also outperformed the broad Asian market indices; gaining 5.03% during the month while the MSCI Asia Pacific ex-Japan Index was up 3.02%. Top performing funds reported gains from the rallying equities, the power sector and healthy IPO activity in the region. Exposure to China was also profitable for most Asian managers – 4 out of the top 10 performing funds⁴ for January employed a Greater China regional mandate.

Strategy Indices

All strategic mandates posted positive returns for January with distressed debt funds delivering the strongest returns. Among the various hedge fund strategies, distressed debt has been the best performing for 6 consecutive months, gaining 14% since August 2012. The strong rebound in risk appetite since 2H 2012 and positive developments in Europe have helped to drive up the high yield and distressed debt sector – the BofA Merrill Lynch High Yield Index⁵ was up 1.63% in January. Among other strategies, managers investing in equities delivered the strongest returns as long/short equity managers gained 2.77% and event driven hedge funds posted returns of 1.88% during the month. CTA/managed futures funds also started the year with healthy returns, posting 1.69% in January as capital moved away from bond havens and into the stocks and commodities markets.

Strategy Indices	January 2012*	2012 Returns	2011 Returns
Eurekahedge Arbitrage Hedge Fund Index	0.21	6.78	1.40
Eurekahedge CTA/Managed Futures Hedge Fund Index	1.69	0.61	0.42
Eurekahedge Distressed Debt Hedge Fund Index	3.47	14.38	-1.04
Eurekahedge Event Driven Hedge Fund Index	1.88	9.57	-4.39
Eurekahedge Fixed Income Hedge Fund Index	1.00	10.57	0.66
Eurekahedge Long/Short Equities Hedge Fund Index	2.77	7.88	-6.73
Eurekahedge Macro Hedge Fund Index	0.91	2.34	-1.06
Eurekahedge Multi-Strategy Hedge Fund Index	1.86	7.93	-1.93
Eurekahedge Relative Value Hedge Fund Index	1.12	10.48	-1.51

Mizuho-Eurekahedge Indices	January 2012*	2012 Returns	2011 Returns
Mizuho-Eurekahedge Index - USD	0.95	5.93	-2.07
Mizuho-Eurekahedge TOP 100 Index - USD	-0.75	6.40	1.87
Mizuho-Eurekahedge TOP 300 Index - USD	-0.05	5.96	0.04

Asia-Eurekahedge Indices	January 2012*	2012 Returns	2011 Returns
Eurekahedge Greater China Hedge Fund Index	6.31	13.53	-13.29
Eurekahedge India Hedge Fund Index	NA	NA	NA

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Footnotes

¹Based on 21.33% of funds which have reported January 2013 returns as at 7 February 2013

²MSCI AC World Index All Core (USD)

³MSCI Emerging Eastern Europe Index IMI (Local Currency)

⁴Based on 20.80% of funds which have reported January 2013 returns as at 7 February 2013

⁵Bank of America Merrill Lynch US High Yield Master II Index (Total Return Index, in Local Currency)