Introduction
The Eurekahedge Hedge Fund Index gained 0.36% in February1 while underlying markets as represented by the MSCI World Index2 declined 1.43% over the same period. Among regional mandates, Japanese managers posted the steepest loss down 3.83% during the month followed by Asia ex-Japan hedge funds which saw losses of 1.78%. Across strategies, CTA/managed futures hedge funds led the table with gains of 2.62% propped up by exposure into safe haven assets such as gold and the Bund.
Final asset flow figures for January revealed that managers reported performance-based losses of US$11.9 billion while recording net asset outflows of US$9.2 billion. Preliminary data for February shows that managers have posted performance-based losses of US$4.7 billion while recording net inflows of US$5.6 billion, bringing the current assets under management (AUM) of the global hedge fund industry to a total of US$2.22 trillion.
Figure 1a: Summary monthly asset flow data since January 2012
Key highlights for February 2016:
- Hedge funds are down 1.27% as of February 2016 year-to-date with total AUM declining by US$20.1 billion. Almost 65% of fund managers are in the red for the year in what is turning out to be a tough start to the year for fund managers.
- Asia ex-Japan managers were in the red for their second consecutive month - down 1.78%, bringing their 2016 year-to-date returns down 6.84% which is their worst start to the year on record. Weaknesses were led by Greater China and India dedicated mandates which are down 8.54% and 9.15% respectively year-to-date
- Latin America is the only region to post positive year-to-date gains, up 1.90% as the brief rally in oil and commodities propped up the region’s performance especially in February. Latin American hedge fund managers also led the tables during the month, up 2.14%.
- On a year-to-date basis, CTA/managed futures hedge funds are in the lead with gains of 4.29% while long/short equities hedge funds posted the steepest decline, down 4.08% over the same period. This compares to losses of 1.05% for CTA/managed futures hedge funds and gains of 2.94% for long/short equities hedge funds respectively in 2015.
- European managers posted their third consecutive month of losses, down 3.28% since December, translating into performance-based losses of US$8.2 billion for managers. Investor flows over the last 12 months stand at US$41.5 billion.
- Strong investor inflows were recorded over the past year for the US$1.48 trillion North American hedge funds industry – investor allocations for 2015 were twice the level of inflows seen in the year before. For more details, please refer to the ‘2015 Overview: Key Trends in North American Hedge Funds’ report.
The full article is available in The Eurekahedge Report accessible to paying subscribers only.
Subscribers may continue to login as usual to download the full report and non-subscribers may email database@eurekahedge.com to enquire on how to obtain the full research report.
