Eurekahedge: Hedge Fund Index Down 0.54% in March

Hedge funds registered their second consecutive month of losses since the start of the year, according to an update of Eurekahedge’s Hedge Fund Index.

The Eurekahedge Hedge Fund Index declined 0.54% in March while still outperforming the MSCI World Index which ended the month down 2.215%.

In addition to the March loss, hedge funds were down 0.13% as of Q1 2018 – their worst quarterly showing since Q1 2016. Assets of the industry expanded by US$31.1 billion over the past three months largely on account of investor subscriptions which stand at US$31.8 billion since the start of 2018.

Key highlights from Eurekahedge’s April Report:

• The US$256.0 billion CTA/managed futures mandated hedge fund industry has seen its asset base contract by US$13.5 billion year-to-date, with managers witnessing the highest performance-based losses of US$12.6 billion among strategic mandates for Q1 2018, while investor redemptions stood at US$0.9 billion over the same period.
• The Eurekahedge CTA/Managed Futures Hedge Fund Index was down 1.54% year-to-date. The US$1.65 trillion North American hedge fund industry posted the steepest performance-based losses among regional mandates for Q1 2018, totalling US$1.2 billion while net asset inflows to the region stood at US$20.1 billion – almost 17% lower compared to the net asset inflows recorded in Q1 2017.
• Multi-strategy mandated hedge funds saw the highest net outflows among strategic mandates for Q1 2018 following steep redemptions worth of US$15.3 billion in February – the highest monthly redemption on record. The Eurekahedge Multi-Strategy Hedge Fund Index was down 0.71% in March and down 0.08% year-to-date. China-US trade war concerns jolted markets, with Asia ex-Japan hedge funds down 1.44% in March, and 0.18% for Q1 2018.
• Equity-long/short managers focused on the region posted their worst quarterly results since Q1 2016 and are down 0.41% for the year. Japanese managers were also down 1.69% in March and down 1.58% year-to-date – the worst performing regional mandated funds in Q1 2018.
• The Eurekahedge Crypto-Currency Hedge Fund Index was down for three consecutive months, losing roughly 34.7% in March bringing its Q1 2018 losses to 48.37%. In contrast, bitcoin has lost over 50.0% over the same period.
• Amidst a slowing launch pipeline in Asia, new funds launched in 2018 are charging higher performance and management fees of 17.75% and 1.41% respectively. In contrast, hedge fund start-up fees stood at 15.43% and 1.30% respectively in 2017.

Eurekahedge’s data was based on 41.72% of funds which have reported March 2018 returns as at 12 April 2018. The company tracks asset flows, hedge fund performance and regional key trends across the hedge fund universe, measuring more than 130 data points on more than 24,000 alternative funds in its database.