Research

Hedge Fund Performance Commentary

Introduction

The Eurekahedge Hedge Fund Index ended the month down 0.06%1, trailing closely behind global equity markets as represented by the MSCI AC World Index (Local) which edged 0.07% higher in September. Roughly half of the hedge fund managers tracked by Eurekahedge managed to generate positive returns over the month. On a year-to-date basis, the Eurekahedge Hedge Fund Index was up 0.26% as of September 2018, with 11% of the constituent funds generating double-digit returns over the first three quarters of the year.

Across geographic mandates, North American hedge funds ended their winning streak and languished into negative territory in September, with the Eurekahedge North American Hedge Fund Index down 0.11%. This was contrary to the strong performance of the S&P 500 index which ended the quarter with its best return since the end of 2013. Concerns over the trade friction and weak currencies continued to loom over the Asian equity markets, and prompted the PBOC to reduce the reserve requirements again in early October, to improve liquidity. Latin American fund managers ended the month on a positive note, owing to the rebound of Brazilian equities following the decline in August.

Figure 1: September 2018 and August 2018 returns across regions
 

On a year-to-date basis, North American fund managers were up 3.22%, followed by Latin American and European fund managers, which gained 2.16% and 0.37% over the first three quarters of 2018. Meanwhile, Asian fund managers continued to lag behind their peers investing in other regions, with the Eurekahedge Asia ex Japan Hedge Fund Index and the Eurekahedge Japan Hedge Fund Index down 4.78% and 3.44% respectively, following consecutive months of losses.

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Footnote
1 Based on 42.25% of funds which have reported September 2018 returns as at 11 October 2018.

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