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Index Press Release - 09 December 2013


Hedge funds on gain streak for third consecutive month, up 1.37%

Hedge funds delivered their third consecutive month of positive returns as global markets maintained their upward momentum. The Eurekahedge Hedge Fund Index was up 1.37%1 during the month, edging past the MSCI World Index2 which gained 1.27% in the month of November.

Key takeaways for the month of November 2013:

  • Total assets in the hedge fund industry are now at a record of US$1.97 trillion, surpassing the previous record of US$1.95 trillion in June 2008

  • Net asset flows for the year recorded at US$122.2 billion, with net allocations to North American managers standing at US$64.0 billion year-to-date

  • European fund managers were up 7.41% November year-to-date with net asset inflows for the year standing at US$48.2 billion - the highest level on record

  • Asia ex-Japan hedge funds have outperformed the underlying markets by more than 10% November year-to-date

  • Greater China focused hedge funds outperformed the Hang Seng Index by over 12% as at end-November

  • Latin America focused managers posted fifth consecutive month of positive returns - outperforming the MSCI EM Latin America Index3 by almost 8% on a year-to-date basis

  • Distressed debt investing remain the best performing strategy in 2013, up 14.81% November year-to-date

  • Japanese hedge funds remained ahead of other regions, up 24% as at end-November

  • Eurekahedge is currently tracking over 1200 funds with year-to-date returns in excess of 15%
 

Main Indices

Main Eurekahedge Indices November
2013*
2013 Returns 2012 Returns
Hedge Fund Index 1.37 7.39 6.62
Fund of Funds Index 4.50 10.31 4.17
Long-Only Absolute Return Fund Index 0.65 10.77 16.04
Islamic Fund Index 0.78 9.13 7.39

 

Regional Indices

Eurekahedge Regional Indices November
2013*
2013 Returns 2012 Returns
North American 1.18 8.59 8.14
European 0.43 7.41 6.93
Eastern Europe & Russia -5.68 -6.57 5.64
Japan 1.27 24.00 5.95
Emerging Markets 0.47 5.47 11.18
Asia ex-Japan 1.73 12.65 12.35
Latin American 0.45 2.04 11.28

Global markets remained upbeat on the back of positive macroeconomic data from the US, with incoming Fed chair Janet Yellen's testimony before the Senate's Banking Committee adding a further dose of optimism to the markets as she reiterated the necessity of the Fed's QE program for an enduring recovery in the US economy. Meanwhile, European markets were supported by the ECB's cut in its interest rates to 0.25% - the lowest on record as fears surfaced over the prospects of a deflationary spiral in the Euro zone region. Asian markets edged upwards on the back of strong third quarter GDP estimates from China, with markets reacting positively as details emerged regarding the CCP’s third plenary session.

All regional mandates, with the exception of Eastern Europe & Russia, posted positive returns with Asian hedge fund managers leading the way. The Eurekahedge Asia ex Japan Hedge Fund Index is up 1.73% during the month, outperforming the MSCI Asia Pacific ex Japan Index4 which was down 0.05%. Japanese fund managers posted yet another month of positive returns, up 1.27% as the Nikkei 225 Index climbed 9.31% helped by a fall in the value of the yen relative to the dollar. North American managers were up 1.18%, (8.59% year-to-date) as equity markets rallied to new highs with the NASDAQ, S&P500 and DJIA gaining 3.58%, 2.80% and 3.48% respectively during the month. European fund managers posted gains of 0.43%, ahead of the MSCI Europe Index5 which was up 0.37% during the month. Emerging markets focused funds are up 0.47%, with fund managers exposed to India posting losses (down 1.88%) as the BSE Sensex Index declined 1.76% in November.

 

Strategy Indices

All hedge fund strategies, excluding relative value, were in the positive with fixed income fund managers leading the pack with returns of 7.28% during the month. A handful of fixed income funds which were investing in 'bitcoins' realised mammoth gains during the month as leading central banks recognised the virtual currency as legal tender. Long/short equity managers were up 0.97% as equity markets rallied, while event driven strategies raked in gains of 1.44%, with the Eurekahedge Event Driven Hedge Fund Index up 10.36% year-to-date. CTA/managed futures funds utilising systematic strategies were up 1.41% while those deploying quant strategies saw gains of 1.71% during the month. On the whole CTA/managed futures strategies continued their rebound and were up 1.22%, though it is the only strategy that remains in the red on a year-to-date basis - down 0.94%. Meanwhile, distressed debt hedge funds are up 1.19%, outperforming the BoFA Merrill Lynch US High Yield Index6 which gained 0.47% during the month. The Eurekahedge Distressed Debt Hedge Fund Index is up an impressive 14.81% on a year-to-date basis.

 

Eurekahedge Strategy Indices November
2013*
2013 Returns 2012 Returns
Arbitrage 0.27 5.86 6.54
CTA/Managed Futures 1.22 -0.94 1.87
Distressed Debt 1.19 14.81 14.30
Event Driven 1.44 10.36 8.94
Fixed Income 7.28 13.37 10.93
Long/Short Equities 0.97 13.00 8.19
Macro 0.09 1.52 3.03
Multi-Strategy 0.75 6.15 7.40
Relative Value -0.29 4.25 10.63

 

Eurekahedge Global Hedge Fund Indices by Fund Size November
2013*
2013 Returns 2012 Returns
Small (< US$100m) 1.58 7.33 6.12
Medium (US$100m - US$500m) 0.98 7.91 6.96
Large (> US$500m) 0.80 6.47 7.31
Billion Dollar 0.94 7.05 8.62

 

Mizuho-Eurekahedge Indices November
2013*
2013 Returns 2012 Returns
Mizuho-Eurekahedge Index - USD 0.38 5.55 5.93
TOP 100 Index - USD 0.34 5.27 6.46
TOP 300 Index - USD 0.39 5.49 5.99

 

Asia-Eurekahedge Indices November
2013*
2013 Returns 2012 Returns
Greater China 3.57 17.53 12.88
India -1.88 -8.25 13.13

* Based on 30.47% of funds which have reported November 2013 returns as at 9 December 2013


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Footnotes

1 Based on 30.47% of funds which have reported November 2013 returns as at 9 December 2013
2 MSCI AC World Index (USD)
3 MSCI Emerging Market Latin America Index (IMI- Local)
4 MSCI AC Asia Pacific ex Japan Index (Local)
5 MSCI AC Europe Index (Local)
6 Bank of America Merrill Lynch US High Yield Index (H0A0 Index- Local)

 

 


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