Research

Hedge Fund Performance Commentary

Introduction

Hedge funds posted another month of positive returns for August as the Eurekahedge Hedge Fund Index gained 0.63%1 during the month. Market sentiment was optimistic for most of the month with prospects for QE3 increasing, positive signals from the Euro zone and stronger US economic data. The MSCI World Index was up by 1.64%2in August.

Most asset classes posted excellent gains during the month amid an environment of resurgent risk appetite to the markets. The BofA-ML High Yield Index3 was up 1.21% in August while the S&P Goldman Sachs Commodity Index4gained 6.37% during the month. The year-to-date (YTD) returns of the Eurekahedge Hedge Fund Index currently stand at 3.16%, while the MSCI World Index is up 7.79% YTD. While this may seem like an underperformance, hedge funds have provided these returns with less than a third of the monthly volatility witnessed in global markets.

August 2012 and July 2012 returns

Most regional mandates finished the month in positive territory with managers allocating to the Americas leading the way. The Eurekahedge Latin American Hedge Fund Index was up 0.98% while North American managers gained 1.06% during the month. Although the markets posted a drop at the start of the month ...

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Footnote

1Based on 57.74% of funds which have reported August 2012 returns as at 17 September 2012

2 The MSCI AC World Index All Core – Local Currency

3Bank of America Merrill Lynch US High Yield Master II Index (Total Return Index, in Local Currency)

4 S&P Goldman Sachs Commodity Index Total Return

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