Early reporting funds suggest another month of consistent returns for hedge funds, with the composite Eurekahedge Hedge Fund Index up 1.1% in August and 13.1% YTD. Managers achieved positive returns from most asset classes during the month equities globally (China being a notable exception) ended the month positive; the MSCI AC World Index rose 3.4%. In the fixed income space, government bonds moved upwards despite persistent strength in risk appetites, while the commodity markets also afforded managers with profitable opportunities during the month.
August marks the 6th consecutive month of positive returns for hedge funds (up 13.1% YTD); hedge funds up 2.6% for the last 12 months, while the MSCI AC World Index is down 18.5% for the same period.Net inflows of USD 4.5 billions in August, with over 50% of the reporting funds attracting capital during the month.Over 300 new launches and 400 fund closures confirmed by Eurekahedge so far this year.Most geographical investment mandates recorded gains averaging close to or over 2% during August, with European managers (2.6%) delivering the best gains, on average. Managers in the region benefited partly from upward movement in regional equities (MSCI Europe Index rose 6% in August, with developed markets outperforming emerging market indices), and from bets in favour of government bonds. North American and Latin American funds ended the month with gains averaging 1.8% and 2.1%.
Asian managers, on the other hand, underperformed most others, with Japan-specific funds up 0.7% and their Asia ex-Japan-investing counterparts down 1.1%. The losses across Asia ex-Japan were mainly an outcome of the marked underperformance of regional equity markets; equities in China, Hong Kong and Taiwan lost 21.8%, 4.1% and 3.6% respectively. Significant losses from allocations to the region also go some way in explaining the underperformance of broader emerging market-investing funds, which ended the month flat to positive.
D.C.