The benchmark Eurekahedge Hedge Fund Index was up 2.16% in April 2021 and up 6.99% in 2021. Total assets under management increased by US$49.0 billion during the month – the sector witnessed performance-based gains of US28.8 billion while registering net asset inflows of US$20.1 billion. The total size of the industry now stands at US$2,339.0 billion.
The Eurekahedge Hedge Fund Index was up 2.16% in April, supported by the robust performance of the global equity market as represented by the MSCI ACWI (Local) which gained 3.53% over the same month. Better than expected macroeconomic data and strong corporate earnings boosted the performance of the equity market as the S&P500 returned 5.24% in April. The Federal Reserve reassured the market that monetary policy will remain accommodative to support economic growth amid lingering fears that the emergence of new variants of COVID-19 could lead to recurring waves of infections and derail the recovery of the global economy.
The Eurekahedge Hedge Fund Index was up 2.16% in April, supported by the robust performance of the global equity market as represented by the MSCI ACWI (Local) which gained 3.53% over the same month. Strong corporate earnings and better than expected macroeconomic data acted as a tailwind to the performance of the equity market over the month. As fears of the COVID-19 pandemic’s impact on the recovery of the US economy lingered, the Federal Reserve reassured the market that monetary policy will be kept accommodative until the economy has made sufficient progress towards a recovery. The yield of the 10-year Treasury Note declined by 12 bp, causing a rally in interest rate sensitive tech stocks during the month.
The global hedge fund industry has witnessed a trend of declining management and performance fees over the past decade, calling into question the traditional “2 and 20” fee structure the industry was famous for. Mediocre returns over recent years – as opposed to the double-digit annual returns investors had come to expect from hedge funds pre-2008 along with increasing competition within the industry and tighter regulation over alternative investment vehicles are some key factors which have contributed to this trend. Investor experience during the 2008 global financial crisis had resulted in more disintermediation within the industry, with institutional investors engaging hedge fund managers directly. Faced with more proactive and demanding investors, many hedge fund managers ended up lowering their fees, or adopting stricter hurdle rates and shorter lockup periods. Nevertheless, as we will discuss in this piece, a sizeable part of the hedge fund industry has continued to maintain leve
The Eurekahedge European Hedge Fund Index was up 3.83% as of March 2021 year-to-date, supported by the robust performance of the underlying equity market in the region as reflected by the 7.02% return of the MSCI AC Europe IMI over the same period. The speedy COVID-19 vaccine rollout on top of the accommodative monetary policy exhibited by the European Central Bank to support the economies from the ongoing crisis acted as a tailwind to the equity market in the region. The EURO STOXX 50 which represents the leading blue-chip companies in the Euro Zone recorded a double-digit return of 11.88% over the first three months. In the same vein, DAX and CAC 40 were up 9.40% and 9.29% over the same period thanks to the gradual economic recovery in the region as seen on their strong macroeconomic data.
Eurekahedge’s European hedge funds infographic sums up the industry as at May 2021. Find out more about fund of hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.