Eurekahedge: Hedge Funds Up Marginally In August As Outflows Continue

Sep 20 2016 | 11:53pm ET

Hedge funds eked out a minimal gain in August to book their sixth consecutive month statistically in the green, according to Eurekahedge, but the firm’s Hedge Fund Index underperformed underlying markets and asset flows continued to be unfavorable.

The Eurekahedge Hedge Fund Index ended August up 0.03%, compared to the 0.48% gain booked by underlying markets as represented by the MSCI World Index. Among regional mandates, Asia ex-Japan managers led the table, up 1.26% during the month, Eurekahedge said, followed by Latin American managers who were up 0.71%. 

Across strategies, distressed debt hedge funds led the table with returns of 1.71%, followed by event driven hedge funds with 1.42%. CTA/managed futures hedge funds managers came in last, with losses of 1.91%, while macro hedge funds fell 0.32%. 

On a year-to-date basis, the Eurekahedge Hedge Fund Index is up 2.58%, with close to 60% of managers in positive territory. Roughly 14% of these managers posted year-to-date returns in excess of 10% over the past eight months, 40% of which are L/S equity and another 20% are CTA/managed futures funds. 

Other key highlights from Eurekahedge’s August 2016 Report:

  • Hedge funds witnessed four consecutive months of outflows with investor redemptions totaling $23.8 billion during this period. Total hedge fund assets grew by $17.6 billion over the past eight months, with the industry's total assets currently standing at $2.26 trillion.
  • The $800 billion long/short equity hedge fund space has seen investor redemptions of $19.5 billion over four consecutive months ending August. The Eurekahedge Long/Short Equity Hedge Fund Index is up 1.50% for the year. 
  • The $1.5 trillion North American hedge fund industry has recorded performance-based gains of $19.3 billion over the past three months whilst seeing net investor redemptions of $8.6 billion simultaneously. Among developed market mandates, North American managers lead up 4.54% for the year.
  • Redemptions have been picking up pace in the $531.1 billion European hedge fund industry, which saw four consecutive months of outflows totaling $13.7 billion in the period ending August. 
  • Within Asia Pacific, Japan dedicated strategies have been the worst performing, down 4.51%, while India dedicated mandates have posted the best returns, up 7.02% for the year. Broad Asia ex-Japan mandates are up a modest 1.54% with dedicated Greater China mandates down 2.28% for the year.
  • The $252 billion CTA/managed futures sector has recorded the strongest interest from investors this year, seeing $12 billion inflows as of August 2016 year-to-date. 

Eurekahedge’s data is based on 51.32% of funds that had reported August 2016 returns as at 14 September 2016. The company tracks asset flows, hedge fund performance and regional key trends across the hedge fund universe, tracking more than 130 data points on more than 24,000 alternative funds in its database.

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