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Hedge Fund Performance Commentary


The Eurekahedge Hedge Fund Index was up 0.62%1 in July, supported by gains in developed market equities and bonds over the month. The MSCI ACWI (Local) ended the month up 0.83% with US equities outperforming other markets. The anticipated rate cut from the Federal Reserve combined with the resumption of the US-China trade talks after the breakdown in May boosted the US equity markets and pushed Wall Street’s three major stock indices to new all-time highs during the month. On the other hand, the trade dispute between Japan and South Korea, together with lacklustre economic data in India pushed Asian equities lower. Returns were positive across geographic mandates in July, with North American fund managers gaining 0.32% and Asia ex-Japan fund managers up 0.73%. Fund managers utilising equity long-bias strategies gained 0.62% throughout the month, pushing their year-to-date return to 11.65%.

Approximately 33.7% of the underlying constituents of the Eurekahedge Hedge Fund Index posted positive returns in July, and 30.8% of the fund managers in the database were able to generate double-digit returns over the first seven months of the year. Returns were positive across regions, with Asia ex-Japan fund managers up 0.73%, despite the escalating US-China trade war and ongoing protests in Hong Kong. Fund managers focusing on North America gained 0.32% as the Fed’s expected rate cut during the end of the month drove the region’s equity market higher. Asia ex-Japan hedge funds have returned 7.47%, ahead of their North American peers who were up 6.90% over the first seven months of 2019.

Figure 1: July 2019 and June 2019 returns across regions

Figure 2 illustrates the year-to-date performance of hedge fund managers across regions. Supported by the strong performance of the global equity and bond markets, all regional mandates were up for the year, with Latin American hedge funds leading the pack with their 10.12% return. On the other end, fund managers focusing on Japan have returned 2.44% year-to-date, trailing behind the other regional mandates.

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1Based on 55.29% of funds which have reported July 2019 returns as at 15 August 2019