News & Events

Asset Flows Update

The Eurekahedge Hedge Fund Index was up 4.03%1 in April, supported by the strong performance of the global equity market which pushed the MSCI ACWI IMI (Local) up 10.47% over the month. Global equities enjoyed a strong rally throughout the month on the back of optimism over the development of potential COVID-19 vaccines and the reopening of the economy. In the US, despite the unprecedented increase of jobless claims, which pushed their unemployment rate to 14.7% - a level not seen since the Great Depression, the US equity benchmarks recorded their strongest monthly performance since 1987. The S&P 500 gained 12.68%, while the tech-heavy NASDAQ was on track to recover back to its end-2019 level with 15.45% return over the month. US equities reacted positively on the approval of the fourth economic stimulus package in the congress. In the same vein, European equities registered robust performance as most countries in the region were on track to ease their lockdown measures, and the ECB announced a half trillion economic stimulus. The DAX and CAC40 returned 9.32% and 5.02% respectively in April. Over in Asia, following the global risk-on sentiment, most of the equity markets in region ended the month in positive, with the KOSPI and Nikkei 225 up 10.99% and 6.75% respectively throughout the month.

Final asset flow figures for March showed that hedge fund managers recorded performance-based losses totalling US$139.6 billion, on top of net investor redemptions of US$81.0 billion throughout the month. Preliminary data for April estimated that the global hedge fund industry witnessed US$24.0 billion of performance-driven gains, and US$3.0 billion of net investor inflows. The assets under management (AUM) of the global hedge fund industry stood at US$2,065.5 billion as of end-April 2020. On an annual basis, the industry had seen US$154.2 billion of performance decline and US$82.9 billion of investor redemptions over the first four months of 2020.

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

Key highlights for April 2020:

  • The Eurekahedge Hedge Fund Index gained 4.03% in April, recording its best monthly performance since May 2009, supported by the robust performance of the underlying global equity market as seen by the 10.47% return of the MSCI AC World Index in April.
  • The global hedge fund industry witnessed its sharpest monthly performance-based decline in history as fund managers lost US$139.6 billion in March, on top of the US$81.0 billion redeemed by investors during the month.
  • The Eurekahedge Fixed Income Hedge Fund Index was up 3.12% in April as the monetary stimuli of central banks, particularly the Federal Reserve and the ECB resulted in lower yields in the government bond market.
  • Hedge funds utilising AI strategies recovered from the losses they suffered in February as they gained 0.77% in April. On a year-to-date basis, the Eurekahedge AI Hedge Fund Index was flat over the first four months of 2020.
  • The Eurekahedge Crypto-Currency Hedge Fund Index was up 26.96% in April – recording its strongest monthly performance since April 2018, supported by the strong performance of Bitcoin which ended the month up 35.31%. Fund managers focusing on crypto-currencies gained 23.61% as of April 2020.

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1 Based on 48.36% of funds which have reported April 2020 returns as at 14 May 2020