The benchmark Eurekahedge Hedge Fund Index was up 0.87% in May 2021 and up 7.71% in 2021. Total assets under management increased by US$29.2 billion during the month – the sector witnessed performance-based gains of US7.1 billion while registering net asset inflows of US$22.1 billion. The total size of the industry now stands at US$2,372.7 billion.
The Eurekahedge Hedge Fund Index was up 0.87% in May, supported by the robust performance of the global equity market as represented by the MSCI ACWI (Local) which gained 0.83% over the same month. Year-on-year US inflation rose to 5.0% for May from 4.2% in April, the highest level in over a decade. The heightened inflation figures worried investors who were concerned that this could force the Federal Reserve to tighten monetary policy earlier than expected to achieve its 2% average inflation goal.
The Eurekahedge Hedge Fund Index was up 0.87% in May, supported by the robust performance of the global equity market as represented by the MSCI ACWI (Local) which gained 0.83% over the same month. Consumer prices in May rose by 5.0% from a year ago, the highest level since August 2008 and caused concerns among investors that this could compel the Federal Reserve to tighten its easy-money policies earlier than it had planned to achieve its 2% average inflation goal. Despite the higher inflation figure, the Federal Reserve has signalled that interest rates will be increased only after the economy has made rapid progress toward the committee’s goals.
Since the onset of the global financial crisis, investors worldwide have grown more cautious in undertaking investments and have increased their demands for underlying investment products and instruments to be monitored by international compliance standards. The Undertakings for Collective Investment in Transferable Securities or ‘UCITS’ was developed to meet this post-crisis demand, as UCITS is embodied by strong regulation, resulting in a high level of investor protection with certain restrictions such as liquidity of the underlying assets and leverage caps to provide added transparency to investors.
The return of market volatility on the back of the ongoing COVID-19 pandemic around the globe and the retail trading frenzy of meme stocks like GameStop and AMC Entertainment has pushed two particular niche hedge fund strategies back into the spotlight; the CBOE Eurekahedge Long Volatility Hedge Fund Index and the CBOE Eurekahedge Tail Risk Hedge Fund Index returned 25.41% and 34.84% respectively in 2020. The two strategies which provide crisis alpha and protection for institutional portfolios have long since generated debates among asset owners and academics alike.
Eurekahedge’s UCITS hedge funds infographic sums up the industry as at June 2021. Find out more about UCITS 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.