Research

Asset Flows Update

Introduction

The Eurekahedge Hedge Fund Index fell 2.13%1 in August amid heightened volatility in global markets and increased risk aversion. Despite the negative returns, managers delivered significant outperformance and downturn protection in a highly volatile environment. The MSCI World Index fell 7.70%2 as market sentiment turned bearish, marked by global markets changing directions frequently throughout the month. Hedge funds were able to deliver the 5.57% outperformance against the MSCI World Index, as the sector continued to attract assets, albeit marginally.

Total assets under management (AuM) were down by US$1.7 billion with the size of the industry continuing to hover around the US$1.82 trillion mark. Performance-based losses for the month totalled US$3.2 billion but despite the high volatility environment, investors still allocated capital to the hedge fund industry. Managers attracted net positive asset flows of US$1.5 billion bringing the total asset flow for the year to US$120.8 billion.

Figure 1: Summary monthly asset flow data since December 2008

Key highlights for the month of August:

  • Hedge funds outperformed global markets3 by 5.57% in August
  • Macro hedge funds gained 0.19% during the month

 

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Footnote

1 Based on 67.66% of funds which have reported August 2011 returns as at 16 September 2011

2 MSCI AC World Index USD Currency

3 As represented by MSCI World Index

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