Research

Asset Flows Update

Introduction

The Eurekahedge Hedge Fund Index grew 0.88% in July1 while underlying markets, as represented by the MSCI World Index2, gained 1.64% over the same period. Among regional mandates, Latin American managers led the table, up 3.68% during the month followed by Asia ex-Japan managers who were up 2.45%. Across strategies, long/short equities hedge funds led the table with gains of 1.15% followed by CTA/managed futures hedge funds which were up 1.08%.

Final asset flow figures for June 2017 revealed that managers reported performance-based losses of US$8.4 billion while recording net asset inflows of US$14.0 billion. Preliminary data for July shows that managers have posted performance-based gains of US$4.7 billion. Preliminary net asset flows were positive in July with US$5.4 billion of inflows into the industry, bringing the current assets under management (AUM) of the global hedge fund industry to a total of US$2.33 trillion.

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

 

Key highlights for July 2017:

  • Hedge funds were up 0.88% in July with 2017 year-to-date gains coming in at 4.27%, roughly 73% of fund managers are in positive territory year-to-date while almost 15% have posted double digit gains.
  • Total hedge fund assets grew by US$108.6 billion over the past seven months with US$71.6 billion attributed to investor inflows while managers posted performance-based gains of US$37.0 billion with the industry’s total assets currently standing at US$2.33 trillion.
  • AUM for the North American hedge fund industry has reached a record high of US$1.56 trillion. Investor allocations for 2017 year-to-date stood at US$46.5 billion, while US$19.1 billion of performance-based gains were recorded over the same period of time.
  • Smaller funds managing assets in the range of US$100 to US$500 million have raised almost US$22 billion this year, while the billion dollar club has accounted for US$44 billion in inflows as investor appetite for hedge funds continues to improve.
  • The US$151.5 billion arbitrage mandated hedge fund industry saw the highest net investor inflows of US$13.0 billion among strategic mandates for 2017 year-to-date. Managers posted performance-based gains as of 2017 year-to-date totalling US$3.8 billion.
  • As of July 2017 year-to-date, Asian funds have recorded a growth in AUM of US$10.3 billion, with US$6.6 billion accounted for by performance-based gains while the remainder, roughly US$3.6 billion has come through net investor allocations. Asia ex-Japan managers are up 12.57% for the year – leading the table among strategic mandates with underlying Greater China and Indian managers up 18.43% and 19.31% year-to-date respectively. Japan focused funds are up 5.71% over the same period.

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Footnote
1 Based on 44.32% of funds which have reported July 2017 returns as at 10 August 2017
2 MSCI AC World Index (Local)
 
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