Research

Asset Flows Update

Introduction

Hedge funds were off to a strong start in 2015, with the Eurekahedge Hedge Fund Index gaining 1.29%1, outperforming underlying markets as the MSCI World Index2 fell 0.41% over concerns about a lack of global demand and Greece’s debt problems. This atmosphere of uncertainty and central bank activity contributed to heightened market volatility, which picked up in the first trading month of the year. US equities witnessed their largest loss since January 2014, underperforming global markets significantly as concerns over the strong US dollar and declining growth overseas weighed in on regional markets despite the strong economic picture in the US.

Final asset flow figures for December revealed that managers reported performance-based gains of US$3.7 billion while recording net asset outflows of US$9.6 billion. Preliminary data for January shows that managers have posted performance-based gains of US$21.5 billion while recording net outflows of US$3.2 billion, bringing the current assets under management (AUM) of the global hedge fund industry to a total of US$2.15 trillion – its highest level on record.

Figure 1: Summary monthly asset flow data since January 2011
 

Key highlights for January 2015:

  • Net asset outflows for the month stand at US$3.2 billion, nearly twice the outflows for the same period last year. This was more than compensated for by strong performance-based gains of US$21.5 billion.
  • The Eurekahedge Billion Dollar Hedge Fund Index returned 1.36% in January; its best return over a 15-month trailing period which translated into performance-based gains of US$17.95 billion during the month.
  • Asia ex-Japan investing funds have delivered the best returns globally and are up 1.65% for January, led by India focused funds which gained 6.26%.

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Footnote
1 Based on 41.20% of funds which have reported January 2015 returns as at 12 February 2015
2 MSCI AC World Index (Local)
 
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