Introduction
Hedge funds ended May in positive territory with the Eurekahedge Hedge Fund Index up 1.12%1 as global markets showed signs of stabilisation following a choppy start to the year. Moderate levels of global economic activity coupled with a supportive monetary policy outlook led to a pro-risk environment in May which saw equities and bonds appreciate while volatility levels subsided. On a year-to-date basis, hedge funds are up 1.88% while the MSCI World Index2 has returned 2.63% in the first five months of 2014. Billion dollar hedge funds tracked by Eurekahedge posted performance-based gains of US$6.6 billion in May while recording net asset inflows of US$1.0 billion as per preliminary figures. Since January 2013, these billion dollar hedge funds have delivered performance-based gains of almost US$70 billion while recording net asset allocations of US$161 billion.
Final asset flow figures for April revealed that managers incurred performance-based losses of US$0.7 billion while recording net asset inflows of US$17.3 billion as hedge funds continued to attract strong capital allocations from investors in 2014. Preliminary data for May shows that managers have posted performance-based gains of US$11.1 billion while net asset inflows for the month stand at US$2.1 billion, bringing the current assets under management (AUM) of the industry to US$2.11 trillion – the highest level on record.
Summary monthly asset flow data since January 2011
Key highlights for May 2014:
- Hedge funds are up 1.88% year-to-date, with fund managers delivering performance-based gains of US$30.0 billion and recording net asset inflows of US$62.3 billion over this period, bringing the current AUM of the global hedge fund industry to a new record high of US$2.1 trillion. Since January 2013, investors have allocated US$ 200 billion of new capital to hedge funds.
- Assets under management of the North American hedge fund industry breached past the US$1.4 trillion mark, and are at their highest recorded level with the Eurekahedge North American Hedge Fund Index up 3.20% year-to-date.
- Long/short equities funds record their 18th consecutive month of positive net asset flows with net capital allocations at US$50.7 billion year-to-date. Total assets in long/short equities hedge funds stand at US$717.2 billion and nearing their December 2007 historical high of US$756 billion.
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Footnote
1Based on 49.90% of funds which have reported May 2014 returns as at 12 June 2014
2 MSCI AC World Index (Local)
