Introduction
Hedge funds outperformed underlying markets by 7.77%1 in May. The composite Eurekahedge Hedge Fund Index was down only 1.55% on the month as regional equities around the globe tumbled. Comparatively, the MSCI World Index lost 9.32% while stocks in Europe and Latin America witnessed losses of 13.42% and 13.48% respectively. All regional hedge fund mandates finished the month with negative returns although managers across the board were able to control their losses and protect their portfolios. Political instability in Europe, coupled with slowing growth in China prompted clients to redeem US$8.68 billion from hedge funds, while performance flows amounted to a decline of US$5.01 billion. Total industry assets however are higher by 2.42% year-to-date and remain above the US$1.74 trillion mark.
Highlights of hedge fund performance and asset flows for the month are as follows:
| May 2012 | US$ billion |
|---|---|
| Allocation (Inflows) | 8.69 |
| Redemption (Outflows) | -17.37 |
| Net Asset Flows | -8.68 |
| Positive Performance (Growth) | 30.05 |
| Negative Performance (Decline) | -35.06 |
| Total | -5.01 |
| Overall Total | -13.69 |
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Footnote
1 Based on 58.75% of funds which have reported May 2012 returns as at 15 June 2012
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