Research

Asset Flows Update

Hedge fund returns for June were in the red for the fourth consecutive month making it the longest running losing streak for the industry since 2008. The Eurekahedge Hedge Fund Index was down by 0.14%1 during the month while comparatively the MSCI World Index was up 3.65%2 amid reversal in market trends and a month-end rally.

Total assets under management (AUM) decreased by US$8.2 billion, bringing the size of the industry to US$1.73 trillion. Most of the decreases in assets were due to performance-based declines, as some of the larger hedge funds posted losses for the month, accounting for US$6.62 billion. Managers also witnessed negative net asset flows of US$1.61 billion during the month.

Figure 1: Summary monthly asset flow data since January 2010

Key highlights for June 2012:

  • The Mizuho-Eurekahedge Asia ex-Japan Index was up 1.38% in June, showing that larger regioinal funds outperformed their peers.
  • Relative value hedge funds witnessed six months of back-to-back net inflows, raising more than US$7 billion.
  • Funds charging higher fees delivered better performance in June 2012 year-to-date, and over the last four years.

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Footnote

1 Based on 50.83% of funds which have reported June-2012 returns as at 13-July-2012

2 The MSCI AC World Index All Core – Local Currency

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