Introduction
The Eurekahedge Hedge Fund Index posted its first losing month in 2015, down 1.19% in June1 outperforming underlying markets as represented by the MSCI World Index2 which was down 2.88% during the month. Despite a strong start to the year, events in Europe and China have dented hedge fund returns in June, with overall 1H 2015 returns coming in at 3.37%, comparable to the 3.11% gain seen over the same period last year.
Final asset flow figures for May revealed that managers reported performance-based gains of US$10.5 billion while recording net asset inflows of US$16.07 billion. Preliminary data for June shows that managers have posted performance-based losses of US$18.9 billion while recording net inflows of US$3.6 billion, bringing the current assets under management (AUM) of the global hedge fund industry to a total of US$2.22 trillion – almost US$86.2 billion higher than the record US$2.14 trillion reported last year.
Figure 1: Summary monthly asset flow data since January 2012
Key highlights for June 2015:
- Hedge fund assets under management have increased by US$93 billion in the first six months of 2015, with roughly US$52 billion coming from performance driven gains and US$41 billion from new investor allocations.
- Despite losses of 1.13% in June, European mandates continue to see resurgence in investor allocations. European hedge funds have recorded US$12.5 billion in new investor allocations for Q2 2015 following net outflows of US$17.1 billion over the three preceding quarters.
- CTA/managed futures funds have grown their asset base by 10.86% in 2015 largely on the back of strong capital inflows totalling US$20 billion - its highest 1H investor allocation since 2008.
- Asia ex-Japan mandated hedge funds lost 1.58% in June and recorded US$1 billion worth of performance-based losses in the worst month for regional managers since the taper tantrum of 2013.
- North American managers lead in terms of year-to-date net investor inflows recording US$24.9 billion in new allocations, about two-thirds the level seen for the same period in 1H 2014.
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