News & Events

Asset Flows Update

The Eurekahedge Hedge Fund Index gained 0.17%1 in August, outperforming the global equity market which slumped 2.37% over the month, as represented by the MSCI ACWI (Local). The re-escalation of the US-China trade war combined with other political concerns resulted in weak global equity performance during the month. Despite the ongoing trade talks, the US imposed additional tariffs to US$300 billion of Chinese imported goods. The move prompted China to levy retaliatory tariffs to US imported goods, which rattled the world’s financial markets. Meanwhile, the deteriorating bilateral relationship between Japan and South Korea, the ongoing protests in Hong Kong, and the heightened risk of a no-deal Brexit also contributed to the risk-off sentiment among investors. Fund managers focusing on North America and Asia ex-Japan were down 0.78% and 0.96% respectively in August. Nonetheless, the two mandates are still up 6.04% and 6.83% respectively on a year-to-date basis, owing to their strong performance during the earlier months of the year.

Final asset flow figures for July showed that hedge fund managers’ recorded performance-based gains totalling US$21.1 billion counterbalanced by investor redemptions of US$20.2 billion throughout the month. Preliminary data for August revealed that the global hedge fund industry witnessed US$1.9 billion of performance-driven loss and US$2.5 billion of net investor outflows. The assets under management (AUM) of the global hedge fund industry stood at US$2,282.8 billion as of August 2019. On a year-to-date basis, the industry has seen US$99.7 billion of performance growth and US$109.1 billion of investor redemptions over the first eight months of 2019.

Figure 1a: Summary monthly asset flow data since January 2013

Key highlights for August 2019:

  • The Eurekahedge Hedge Fund Index was up 0.17% in August, bringing its year-to-date return to 6.58%. Roughly 32.6% of the hedge fund managers comprising the index have recorded double-digit gains over the first eight months of the year.
  • The global hedge fund industry AUM has declined by US$9.4 billion as of August 2019 year-to-date. Final Q2 2019 net outflows figure stood at US$40.0 billion, as investor redemptions continued to slow down. Hedge fund managers recorded US$46.4 billion and US$94.7 billion of net outflows in Q1 2019 and Q4 2018, respectively.
  • The Eurekahedge North American Hedge Fund Index was up 6.04% year-to-date, as fund managers focusing on the region benefited from the equity market rally throughout the first eight months of the year. The S&P 500 has gained 16.78% over the first eight months of 2019, while the tech-heavy NASDAQ Composite was up 20.01% over the same period. North American hedge fund managers have recorded US$69.6 billion of performance growth year-to-date.
  • The Eurekahedge Greater China Hedge Fund Index lost 1.48% in August, dragging its year-to-date gain to 8.31%. The US$29.2 billion mandate has seen US$1.6 billion of performance growth, offset by US$0.4 billion of investor redemptions year-to-date.
  • The Eurekahedge CTA/Managed Futures Hedge Fund Index was up 2.22% in August, with mixed returns among its underlying regional mandates. Preliminary data showed that CTA/managed futures fund managers have generated US$12.1 billion of performance growth in August. On a year-to-date basis the mandate’s AUM has grown by US$18.6 billion, in contrast to the US$45.5 billion decline recorded over 2018.
  • Hedge fund managers utilising fixed income strategies ended the month of August up 0.17% on the back of robust government and corporate bond markets. Dovish central banks and anticipations over further stimulus continued to push yields lower during the month. On a year-to-date basis, the Eurekahedge Fixed Income Hedge Fund Index has returned 5.80%.
  • The Eurekahedge ILS Advisers Index was down 0.27% in August, pushing its year-to-date loss to 0.97%. Despite being a calm period of insurance losses, the first half of 2019 has seen ILS hedge fund managers crippled by loss creep from past events.
  • The Eurekahedge Crypto-Currency Hedge Fund Index was down 4.86% in August, trailing behind Bitcoin which ended the month flat. On a year-to-date basis, crypto hedge fund managers have returned 54.83% over the first eight months of 2019.

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1 Based on 42.07% of funds which have reported August 2019 returns as at 12 September 2019