Research

Asset Flows Update

Introduction

Hedge funds ended their winning run in October with flat-to-slightly-negative returns for the month. The Eurekahedge Hedge Fund Index was down 0.19%1 during the month bringing its October year-to-date (YTD) return to 4.11%. The month witnessed a difficult trading environment for hedge funds as underlying markets witnessed trend reversals across a variety of sectors. The MSCI World Index2 dropped by 0.76% in October.

Total assets under management (AUM) decreased by more than US$11 billion during the month, bringing the total size of the industry back to US$1.76 trillion. Revised figures based on late reporting funds for September showed that the industry had expanded by US$20 billion. Hedge funds posted losses of US$5.8 billion in October with mixed returns across the different strategies. Net asset flows for the month were also negative as investors withdrew US$5.7 billion from the industry.

Figure 1: Summary monthly asset flow data since January 2010
 

Key highlights for October 2012:

  • Hedge funds saw their winning streak end with a loss in October — but they remain in the black, up 4.11% YTD
  • There are currently over 1300 funds up more than 10% YTD 2012 and almost 700 funds up more than 15%

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Footnote
1 Based on 65.59% of funds which have reported October 2012 returns as at 16 November 2012
2 MSCI AC World Index All Core – USD
 
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