Hedge funds have worst showing in two years in Q1
Hedge funds were down 0.13 per cent at the end of Q1 2018 – their worst quarterly showing since Q1 2016, according to the April 2018 Eurekahedge Report.
Industry assets meanwhile expanded by USD31.1 billion over the quarter, largely on account of investor subscriptions which stand at USD31.8 billion since the start of 2018.
The USD256.0 billion CTA/managed futures mandated hedge fund industry has seen its asset base contract by USD13.5 billion year-to-date, with managers witnessing the highest performance-based losses of USD12.6 billion among strategic mandates for Q1 2018, while investor redemptions stood at USD0.9 billion over the same period. The Eurekahedge CTA/Managed Futures Hedge Fund Index was down 1.54 per cent year-to-date.
The USD1.65 trillion North American hedge fund industry posted the steepest performance-based losses among regional mandates for Q1 2018, totalling USD1.2 billion while net asset inflows to the region stood at USD20.1 billion – almost 17 per cent 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 USD15.3 billion in February – the highest monthly redemption on record. The Eurekahedge Multi-Strategy Hedge Fund Index was down 0.71 per cent in March and down 0.08 per cent year-to-date.
China-US trade war concerns jolted markets, with Asia ex-Japan hedge funds down 1.44 per cent in March, and 0.18 per cent for Q1 2018. Equity-long/short managers focused on the region posted their worst quarterly results since Q1 2016 and are down 0.41 per cent for the year. Japanese managers were also down 1.69 per cent in March and down 1.58 per cent 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 per cent in March bringing its Q1 2018 losses to 48.37 per cent. In contrast, bitcoin has lost over 50.0 per cent 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 per cent and 1.41 per cent respectively. In contrast, hedge fund start-up fees stood at 15.43 per cent and 1.30 per cent respectively in 2017. For more details, please refer to the 2017 Overview: Key Trends in Asian Hedge Funds report.