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Index Press Release - 14 January 2014


Asian managers outperformed global peers as hedge funds up 8.00% in 2013

Hedge funds delivered their fourth consecutive month of positive returns as global markets ended the year on a strong note of optimism. The Eurekahedge Hedge Fund Index was up 0.99%1 during the month. The MSCI World Index gained 1.67% in the month of December.

Key takeaways for the month of December 2013:

  • Total assets in the hedge fund industry rose to US$2.01 trillion, the highest level on record since June 2008 when global AUM peaked at US$1.95 trillion

  • Net asset flows for 2013 stood at US$146.1 billion, with net allocations to North American managers standing at US$73.6 billion year-to-date

  • European fund managers were up 8.79% in 2013 with net asset inflows for the year standing at US$62.4 billion - the highest level on record

  • Asia ex-Japan hedge funds outperformed underlying markets and were up 13.47% in 2013 with overall assets under management growing by US19.1 billion during the past year

  • Greater China focused hedge funds outperformed the Hang Seng Index by more than 16% in 2013

  • Latin America focused managers have outperformed the MSCI EM Latin America Index2 by more than 9% in 2013

  • Distressed debt investing remained the best performing strategy in 2013, up 16.76% for the year, followed by long/short equities which saw gains of 14.87%

  • Japanese hedge funds comprehensively outperformed all regional mandates, up 26.62% in 2013

  • In 2013, almost 2,750 funds in the Eurekahedge database achieved returns greater than 10% - of which over 1,000 were up more than 20% for the year
 

Main Indices

Main Eurekahedge Indices December
2013*
2013 Returns 2012 Returns
Hedge Fund Index 0.99 8.00 6.65
Fund of Funds Index 0.87 8.03 4.20
Long-Only Absolute Return Fund Index 0.73 11.19 16.10
Islamic Fund Index 1.30 10.09 7.40

 

Regional Indices

Eurekahedge Regional Indices December
2013*
2013 Returns 2012 Returns
North American 1.74 10.36 8.12
European 1.04 8.79 6.95
Eastern Europe & Russia 2.50 -1.30 5.64
Japan 2.01 26.62 5.95
Emerging Markets 0.44 5.75 11.11
Asia ex-Japan 0.92 13.47 12.37
Latin American 0.12 1.57 11.26

Global market digested the news of the much awaited QE tapering as the Fed reiterated its resolve to keep interest rates low in order to sustain a continued recovery in the US economy. While North American and European markets edged upwards on the news, emerging market fears over capital outflows resurfaced with the MSCI Emerging Markets Index3 declining 0.93% during the month. Asian markets were mixed during the month as tightening liquidity in mainland China coupled with a decline in the country's PMI gauge dampened investor sentiment.

All regional mandates ended the month in positive territory with Eastern Europe & Russia focused hedge fund managers delivering the strongest returns, up 2.50% - outperforming the MSCI Emerging Eastern Europe Index4 which declined 0.89% during the month. Japanese hedge fund managers delivered yet another month of strong performance with the Eurekahedge Japan Hedge Fund Index up 2.01% and 26.62% for the year as the Nikkei 225 Index climbed up 4.02%, helped by the 2.68% depreciation in the yen relative to the dollar. North American hedge fund managers were up 1.74% (10.36% for the year) as equity markets remained upbeat with the NASDAQ, S&P500 and DJIA gaining 2.87%, 2.36% and 3.05% respectively during the month. European hedge fund managers were up 1.04%, outperforming the MSCI Europe Index5 which gained 0.88% during the month. Asia ex-Japan hedge fund managers were up 0.92%, with Greater China focused hedge fund managers delivering their sixth consecutive month of positive returns, up by 1.39%. The Eurekahedge Asia ex Japan Hedge Fund Index gained 13.47% for the year, outperforming the MSCI Asia ex Pacific Japan Index6 which grew 6.54% in 2013. Emerging markets and Latin America focused hedge fund managers were up 0.44% and 0.12% respectively during the month and have outperformed underlying markets amid a difficult trading environment in 2013 as investors shied away from emerging economies.

 

Strategy Indices

All hedge fund strategies were in the positive with long/short equities hedge fund managers leading the pack with returns of 1.48% during the month as major equity markets trended upwards in December. Distressed debt hedge fund managers were up 1.34%, outperforming the BoFA Merrill Lynch US High Yield Index7 which gained 0.55% during the month. The Eurekahedge Distressed Debt Hedge Fund Index was up an impressive 16.76% in 2013. Relative value hedge fund managers rebounded from their November losses and were up 1.33% during the month, bringing their 2013 returns to 5.70%. CTA/managed futures hedge funds delivered their third consecutive month of positive returns, gaining 1.04% although the strategy remains in negative territory for the year - down 0.35%. Hedge fund managers utilising systematic trading strategies were up 0.75% while those using discretionary strategies were up 0.90%. Managers focused on commodities realised gains of 0.87% as the S&P Goldman Sachs Commodity Index8 climbed 1.93% during the month. Event driven and fixed income strategies gained 1.05% and 0.51% in December while managers utilising macro strategies were marginally positive with returns of 0.05%.

 

Eurekahedge Strategy Indices December
2013*
2013 Returns 2012 Returns
Arbitrage 0.70 6.68 6.54
CTA/Managed Futures 1.04 -0.35 1.82
Distressed Debt 1.34 16.76 14.77
Event Driven 1.05 11.40 8.94
Fixed Income 0.51 8.07 10.94
Long/Short Equities 1.48 14.87 8.18
Macro 0.05 1.77 3.03
Multi-Strategy 0.39 6.34 7.51
Relative Value 1.33 5.70 10.66

 

Eurekahedge Global Hedge Fund Indices by Fund Size December
2013*
2013 Returns 2012 Returns
Small (< US$100m) 1.06 7.79 6.13
Medium (US$100m - US$500m) 0.87 8.69 6.96
Large (> US$500m) 0.75 7.33 7.36
Billion Dollar 0.69 7.82 8.80

 

Mizuho-Eurekahedge Indices December
2013*
2013 Returns 2012 Returns
Mizuho-Eurekahedge Index - USD 0.63 6.40 5.93
TOP 100 Index - USD 0.27 5.85 6.46
TOP 300 Index - USD 0.48 6.22 5.99

 

Asia-Eurekahedge Indices December
2013*
2013 Returns 2012 Returns
Greater China 1.39 19.08 12.88
India 0.99 -6.52 13.13

* Based on 41.42% of funds which have reported December 2013 returns as at 13 January 2014


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Footnotes

1 Based on 41.42% of funds which have reported December 2013 returns as at 13 January 2014
2 MSCI Emerging Market Latin America Index (IMI- Local)
3 MSCI Emerging Market Index (IMI- Local)
4 MSCI Emerging Eastern Europe Index (IMI- Local)
5 MSCI AC Europe Index (Local)
6 MSCI AC Asia Pacific ex Japan Index (Local)
7 Bank of America Merrill Lynch US High Yield Index (H0A0 Index- Local)
8 S&P Goldman Sachs Commodity Index Total Return

 

 


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