Research

Asset Flows Update

Introduction

The Eurekahedge Hedge Fund Index was up 0.03% in August1 while underlying markets as represented by the MSCI World Index2 gained 0.48% over the same period. Among regional mandates, Asia ex-Japan managers led the table, up 1.26% during the month followed by Latin American managers who were up 0.71%. Across strategies, distressed debt hedge funds led the table 1.71% returns followed by event driven hedge funds with 1.42%.

Final asset flow figures for July revealed that managers reported performance-based gains of US$20.7 billion while recording net asset outflows of US$7.5 billion. Preliminary data for August shows that managers have posted performance-based gains of US$1.4 billion while recording net outflows of US$1.4 billion, bringing the current assets under management (AUM) of the global hedge fund industry to a total of US$2.26 trillion.

Figure 1a: Summary monthly asset flow data since January 2012
 

Key highlights for August 2016:

  • Hedge funds witnessed four consecutive months of outflows with investor redemptions totalling US$23.8 billion during this period. Total hedge fund assets grew by US$17.6 billion over the past eight months with the industry’s total assets currently standing at US$2.26 trillion.
  • The US$800 billion long/short equity hedge fund space has seen investor redemptions of US$19.5 billion over four consecutive months ending August. The Eurekahedge Long Short Equities Hedge Fund Index is up 1.50% for the year.
  • The US$1.5 trillion North American hedge fund industry has recorded performance-based gains of US$19.3 billion over the past three months whilst seeing net investor redemptions of US$8.6 billion simultaneously. Among developed market mandates, North American managers lead up 4.54% for the year.
  • Redemptions have been picking up pace in the US$531.1 billion European hedge fund industry which saw four consecutive months of outflows totalling US$13.7 billion in the period ending August. The Eurekahedge European Hedge Fund Index is down 0.95% for the year.
  • Within Asia Pacific, Japan dedicated strategies have been the worst performing, down 4.51% while India dedicated mandates have posted the best returns up 7.02% for the year. Broad Asia ex-Japan mandates are up a modest 1.54% with dedicated Greater China mandates down 2.28% for the year.
  • The US$252 billion CTA/managed futures hedge fund industry recorded the strongest interest from investors this year, seeing US$12.0 billion inflows as of August 2016 year-to-date. The Eurekahedge CTA/Managed Futures Hedge Fund Index is up 1.98% year-to-date with its sub-group of commodity-focused strategies gaining 7.99% while trend following strategies are up 2.34%.
  • Singapore-based Asian hedge funds led the table up 2.08% while Japan and Hong Kong based Asian hedge funds are in the red among key Asian hedge fund centres, down 2.50% and 2.27% respectively for the year. More on this in the 2016 Key Trends in Asian Hedge Funds report.

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Footnote
1 Based on 51.32% of funds which have reported August 2016 returns as at 14 September 2016
2 MSCI AC World Index (Local)
 
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