Hedge fund assets under management grew by US$34.1 billion through December as managers ended 2010 on a high note. The Eurekahedge Hedge Fund Index posted a strong return of 3.01%1 in the month, bringing the yearly return to 10.93%. This marks an outperformance to underlying markets in the yearly return measure as the MSCI World Index2 delivered a 7.83% return for the year.
The total assets in the hedge fund industry reached US$1.67 trillion as the funds posted significant profits and attracted significant capital in December. Performance-based gains accounted for US$26 billion as managers delivered substantial gains on the back of resurgent markets. The sector witnessed net positive asset flows to the tune of US$8.11 billion. Although December is usually a relatively slow month for inflows, the heightened market sentiment led to greater than normal inflows last month.