Research

Asset Flows Update

The Eurekahedge Hedge Fund Index was up 0.15%1 in March, with managers also witnessing strong asset flows of US$13.9 billion from investors. It was, however, a turbulent month for the industry, marked with swings in risk appetite and mid-month trend reversals. Managers did well to navigate through the uncertainty and protect capital. Most market indices ended March in the red – the MSCI World Index2 was down 1.53% in the month.

Total assets under management crossed US$1.75 trillion as investors continued the strong allocation activity from the last quarter of 2010. Updated figures for February show that hedge funds attracted US$23.5 billion during the month and this trend of strong asset flows continued through March when the sector gained another US$13.9 billion. This brings the net asset flows for the first quarter of 2011 to US$55.7 billion – the best quarterly figure since 2Q2007.

Performance-based gains stood at US$4.5 billion for March as most funds delivered marginally positive returns; however, revised figures for February also show much stronger gains of US$16.4 billion during the month. This brings the total increase in assets in the first quarter to US$78.2 billion.

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:

  • Hedge funds gained US$78 billion in 1Q2011, with total assets crossing US$1.75 trillion.
  • Net flows in 1Q2011 were US$55 billion, the strongest quarterly allocation since 2Q2007.
  • Assets in event driven funds reached...

 

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Footnote

1 Based on 68.37% of the funds reporting their March 2011 returns as at 16 April 2011

2 MSCI The World Index Free – Local Currency

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