Research

Asset Flows Update

Introduction

The Eurekahedge Hedge Fund Index advanced 1.09%1 in February, witnessing strong asset flows from investors. Managers capitalised on positive movements in underlying markets as upbeat sentiment pushed most regional indices upwards. The MSCI World Index2 gained 2.75% in the month.

Total assets under management reached US$1.72 trillion as investors continued the strong allocation activity from the last quarter of 2010. After attracting US$17.2 billion in January, managers witnessed a second month of double-digit net positive asset flows, gaining US$12.4 billion. Performance-based growth was also positive in February, with the industry gaining US$10 billion through positive returns as managers delivered substantial gains on the back of resurgent markets.

Figure 1 shows the monthly asset flows across the hedge fund industry since December 2008.

Figure 1: Summary monthly asset flow data since December 2008

Below are the highlights for the month of February:

  • Assets under management crossed US$1.7 trillion for the first time since September 2008.
  • Hedge funds gained nearly US$30 billion through net inflows in the first two months of 2011.
  • Global hedge fund assets increased by 12.44% since the start of July 2010.
  • Hedge funds witnessed an eighth consecutive month of positive returns in February, increasing its YTD return figure to 1.27%.
  • North American hedge funds gained 2.16% in February and were up 14.60% over the last six months.
  • Japanese hedge funds gained 2.62% in February and were up 10.91% over the last six months.
  • Distressed debt hedge funds are the best performing of 2011 so far, with a gain of 2.22% in February…

 

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Footnote
1Based on 63.04% of the funds reporting their February 2011 returns as at 15 March 2011.
2 MSCI The World Index Free – Local Currency
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