Research

Asset Flows Update

Hedge funds posted a remarkable rebound in January as global markets rallied on renewed risk appetite. The Eurekahedge Hedge Fund Index was up 2.10% during the month, making it the best start of the year since 2006. The MSCI World Index gained 4.96% driven by positive data from the US and Europe. The asset-weighted Mizuho-Eurekahedge Index was up 1.58% in January, while the Mizuho-Eurekahedge Emerging Markets Index gained an excellent 5.89% during the month.

The total size of the industry increased by US$15 billion as managers attracted healthy asset flows in addition to posting excellent performance. The net redemptions in 4Q 2011 had partially been attributed to portfolio rebalancing and as expected some of that capital has started to flow back into the industry – net positive asset flow accounted for US$3.7 billion in January. Performance-based growth was also strong during the month with managers posting gains of US$11.4 billion taking the size of the industry to US$1.72 trillion. Going forward we expect the global hedge funds sector to attract an increasing amount of allocations in the first half of the year.

 

Figure 1: Summary monthly asset flow data since December 2009

Monthly asset flow data since December 2009

Key highlights for January 2012:

  • Hedge funds posted their best monthly return since December 2010, gaining 2.10% in January 2012 – making it the best start to a year since 2006.
     
  • All regions and strategies delivered positive returns in January.
     
  • The Mizuho-Eurekahedge Emerging Markets Index was up 5.79% in January ...

 

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