News & Events

Asset Flows Update

The Eurekahedge Hedge Fund Index gained 0.90%1 in November, bringing its year-to-date return to 7.27%. The global hedge fund industry has been supported by the global equity market rally on the back of optimism over the US-China trade negotiation progress and dovish central bank policies throughout the year. Positive geopolitical developments surrounding the trade war and Brexit have also sustained investors’ risk sentiment over the recent months. Returns were positive across regions, with North American fund managers returning 1.59% in November, on the back of the region’s equity market performance which resulted in a new all-time high for the S&P 500. On a year-to-date basis, fund managers focusing on Asia ex-Japan were up 9.42% over the first 11 months of the year, outperforming their North American peers who returned 7.86% over the same period.

Final asset flow figures for October showed that hedge fund managers recorded performance-based gains totalling US$4.8 billion, offset by investor redemptions totalling US$1.0 billion throughout the month. Preliminary data for November estimated that the global hedge fund industry witnessed US$6.0 billion of performance-driven gains and US$3.7 billion of net investor outflows. The assets under management (AUM) of the global hedge fund industry stood at US$2,275.9 billion as of November 2019. On a year-to-date basis, the industry has seen US$115.4 billion of performance growth and US$131.8 billion of investor redemptions.

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

Key highlights for November 2019:

  • The Eurekahedge Hedge Fund Index was up 7.27% year-to-date, supported by the risk-on sentiment among investors and accommodative central bank policies throughout the year. Roughly 33.2% of the hedge fund managers comprising the index have recorded double-digit gains over the first 10 months of the year compared to 9.3% over the same period last year.
  • The global hedge fund industry AUM has declined by US$16.4 billion as of November 2019 year-to-date. Investor redemptions totalling US$131.8 billion have been recorded throughout 2019, a level the industry has not seen since the 2008 global financial crisis.
  • The Eurekahedge North American Hedge Fund Index was up 7.86% year-to-date, as fund managers focusing on the region benefited from the equity market rally throughout the year. The S&P 500 has gained 25.30% as of November 2019 year-to-date, while the tech-heavy NASDAQ Composite was up 30.60% over the same period. North American hedge fund managers have recorded US$81.0 billion of performance growth year-to-date.
  • The Eurekahedge Greater China Hedge Fund Index edged 0.53% higher in November up 12.15% year-to-date despite the weak performance of the region’s equity markets during the month. The US$29.4 billion mandate has seen US$1.9 billion of performance growth, offset by US$0.5 billion of investor redemptions year-to-date.
  • The Eurekahedge Long Short Equities Hedge Fund Index was up 9.01% year-to-date, as they benefited from the robust equity market rally throughout the year, which resulted in double-digit gains for the MSCI ACWI (Local). The strategic mandate has seen US$57.5 billion of performance growth year-to-date.
  • The Eurekahedge Fixed Income Hedge Fund Index has returned 6.65% year-to-date, supported by major central bank policies which pushed yields lower throughout the year. The US 10-year treasury yield briefly dipped below the 1.50% mark in early September, which was the lowest level it has reached since Q3 2016.
  • The Eurekahedge ILS Advisers Index was up 1.31% year-to-date, in contrast to how ILS fund managers were down 3.92% and 5.60% in 2018 and 2017 respectively as they bore the brunt of the catastrophic Atlantic hurricane seasons during those years. Despite the year 2019 being a comparatively calm period of insurance losses, some ILS fund managers comprising the US$89.3 billion industry have been crippled by loss creep from past events.

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1 Based on 41.58% of funds which have reported November 2019 returns as at 12 December 2019