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Hedge Fund Performance Commentary


The Eurekahedge Hedge Fund Index was up 0.31%1 in October, trailing behind the MSCI ACWI (Local), which ended the month up 1.93% over the same period. The resumption of the US-China trade talks resulted in a partial trade agreement between the two largest economies. The positive development prompted President Trump to postpone the scheduled tariff hike on Chinese goods, which boosted US and Asian equities during the month. In the UK, the region’s equity market underperformed their global and EU peers despite the 3-month Brexit extension granted by the EU lawmakers, as a result of the stronger British pound. Government bond yields strengthened over the month, supported by investors’ risk-on sentiment combined with the Fed’s less dovish remark as they signalled a pause in cutting rate for the foreseeable future.

Approximately 63.1% of the underlying constituents of the Eurekahedge Hedge Fund Index posted positive returns in October, and 30.1% of the fund managers in the database were able to generate double-digit returns over the first 10 months of the year. Returns were positive across regions, with Asia ex-Japan fund managers up 2.36%, thanks to the positive development of the US-China trade negotiations. Fund managers focusing on North America returned 0.45%, supported by the Fed’s rate cut. Looking at year-to-date performance, Asia ex-Japan hedge funds have returned 9.74%, ahead of their North American peers who were up 6.26% over the first 10 months of 2019.

Figure 1: October 2019 and September 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 10.04% return. On the other end, fund managers focusing on Japan have returned 2.99% year-to-date, trailing behind the other regional mandates.

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1Based on 48.30% of funds which have reported October 2019 returns as at 14 November 2019