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Index Press Release - 8 October 2013


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 Indices

Main Eurekahedge Indices September
2013*
2013 Returns 2012 Returns
Hedge Fund Index 1.05 4.17 6.59
Fund of Funds Index 1.61 4.51 4.12
Long-Only Absolute Return Fund Index 4.27 6.93 16.00
Islamic Fund Index 1.91 6.63 7.32

 

Regional Indices

Eurekahedge Regional Indices September
2013*
2013 Returns 2012 Returns
North American 1.43 6.13 8.09
European 1.43 4.95 6.97
Eastern Europe & Russia 5.92 -0.57 6.31
Japan 2.69 21.25 5.86
Emerging Markets 1.92 1.93 11.27
Asia ex-Japan 2.81 5.90 12.32
Latin American 1.43 0.37 11.21

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.

 

Strategy Indices

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 September
2013*
2013 Returns 2012 Returns
Arbitrage 0.79 4.89 6.68
CTA/Managed Futures -0.72 -3.23 1.58
Distressed Debt 1.54 11.25 13.98
Event Driven 1.90 7.38 8.90
Fixed Income 1.04 4.07 11.23
Long/Short Equities 2.10 9.00 8.13
Macro 0.59 0.75 3.04
Multi-Strategy 1.41 3.65 7.58
Relative Value 1.01 3.47 10.89

 

Eurekahedge Global Hedge Fund Indices by Fund Size September
2013*
2013 Returns 2012 Returns
Small (< US$100m) 1.05 3.80 5.98
Medium (US$100m - US$500m) 1.05 5.08 7.12
Large (> US$500m) 0.92 3.78 7.38
Billion Dollar 0.77 3.98 8.64

 

Mizuho-Eurekahedge Indices September
2013*
2013 Returns 2012 Returns
Mizuho-Eurekahedge Index - USD 2.04 3.42 5.93
TOP 100 Index - USD 1.64 2.88 6.46
TOP 300 Index - USD 1.86 3.17 5.99

 

Asia-Eurekahedge Indices September
2013*
2013 Returns 2012 Returns
Greater China 2.95 12.09 13.19
India 6.84 -11.68 13.13

* Based on 32.59% of funds which have reported Sep-2013 returns as at 8-Oct-2013


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Footnotes

1 Based on 32.59% of funds which have reported September 2013 returns as at 8 October 2013
2 MSCI AC World Index All Core (Local)
3 MSCI Emerging Eastern Europe Index IMI (Local)
4 S&P Goldman Sachs Commodity Index Total Return

 

 


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