Hedge funds back in the black with 1.05% gain, on upward trend
Hedge funds were back in the black in September as global markets trended upwards during the month. The Eurekahedge Hedge Fund Index was up 1.05%1 while global stock indices outperformed as the MSCI World Index2 gained 3.87% in September.
Key takeaways for the month of September 2013:
Total assets in the hedge fund industry stand at US$1.91 trillion, set to cross the highest level on record by end-2013
Assets in long/short equity hedge funds crossed the US$600 billion mark for the first time since 2008
Asia ex-Japan hedge funds have outperformed the underlying markets by more than 7% September year-to-date
Greater China focused hedge funds witnessed 3 months of positive returns, up 6.22% in the third quarter of 2013
Distressed debt investing remains the best performing strategy in 2013, up 11.25% September year-to-date
Japanese hedge funds remained ahead of other regions, up 21.25% September year-to-date
Main Eurekahedge Indices
Long-Only Absolute Return Fund Index
Eurekahedge Regional Indices
Eastern Europe & Russia
Global markets remained in headline-following mode during the month, rising in the first few weeks as the risk of a US strike on Syria declined. Positive macroeconomic data from Europe and China also pushed up market indices and the decision of the US Federal Reserve to maintain the pace of asset-purchase, added further strength to the rally. Markets declined in the latter half of the month as investor focus turned to the budget impasse in the US Congress.
All regions posted positive returns for the month with emerging markets focused funds posting the strongest gains. Eastern Europe & Russia investing managers were up 5.2% in September while Asia ex-Japan managers gained 2.81%. Eastern European markets posted a remarkable 5.88%3 during the month while Asia ex-Japan markets also posted excellent returns. The Hang Seng Index gained 5.19% in September, the Shanghai Composite grew 3.64% while in Indian the BSE Sensex gained 4.08%. For most of the year. the Eurekahedge Asia ex-Japan Hedge Fund Index has outperformed underlying markets and is up 5.90% September year-to-date, while the MSCI Asia Pacific ex-Japan is down 1.14% over the same period.
Japanese hedge funds also posted strong returns in September, up 2.69% as the Nikkei 225 - after four months of negative returns - witnessed a strong rally during September, fueled by global trends as well as Tokyo’s winning bid to host the 2020 Summer Olympics. The Eurekahedge Japan Hedge Fund Index is up 21.25% September year-to-date. European, Latin American and North American funds were all up 1.43% on average in September.
Most strategies were profitable in September with long/short equity and event driven funds posting the strongest returns on the back of strengthening equities during the month. Long/short equity funds were up 2.10% while event driven managers gained 1.90%. Increased risk appetite during the month also culminated in gains for distressed debt funds which were up 1.54% in September. The Eurekahedge Distressed Debt Hedge Fund Index is up 11.25% September year-to-date, the highest among the various strategic mandates. CTA/managed futures funds posted yet another month of negative returns, down 0.72% in September; their fifth month of back-to-back losses for the managers. Trend following strategies witnessed losses due to reversals of market sentiment during the month. Managers allocating to commodities witnessed losses amid falling prices of precious metals, energy and soft commodities – the S&P Goldman Sachs Commodity Index4 dropped by 3.39% in September.
Eurekahedge Strategy Indices
Eurekahedge Global Hedge Fund Indices by Fund Size
Small (< US$100m)
(US$100m - US$500m)
Large (> US$500m)
Mizuho-Eurekahedge Index - USD
TOP 100 Index - USD
TOP 300 Index - USD
* Based on 32.59% of funds which have reported Sep-2013 returns as at 8-Oct-2013
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1Based on 32.59% of funds which have reported September 2013 returns as at 8 October 2013 2MSCI AC World Index All Core (Local) 3MSCI Emerging Eastern Europe Index IMI (Local) 4S&P Goldman Sachs Commodity Index Total Return