Hedge funds turn positive again April
Hedge funds bounced back to positive territory in April, up 0.55 per cent with the underlying markets, as represented by the MSCI AC World Index (Local) up 1.18 per cent over the same period, according to the latest Eurekahedge Report.
On a year-to-date basis, managers gained 0.23 per cent with 10 per cent of them posting returns in excess of 5 per cent.
Total hedge fund assets grew by USD31.9 billion over the past four months, with USD36.2 billion attributed to investor inflows while managers posted performance-based losses of USD4.4 billion. Investors have been selective in their allocations across strategies with long/short equities and macro hedge funds seeing stronger subscriptions year-to-date.
CTA/managed futures managers posted their third consecutive month of investor redemptions, totalling USD5.9 billion, bringing its year-to-date outflows to USD2.8 billion. Managers have posted performance-based losses of USD11.7 billion as of April 2018 year-to-date, the highest performance-based losses among all strategic mandates.
All strategic mandates were up this month with the Eurekahedge Distressed Debt Hedge Fund Index posting the best returns, up 1.12 per cent during the month – the only strategy to post four consecutive months of gains since the start of the year. Distressed debt managers saw investor redemptions of USD1.3 billion as of 2018 year-to-date while performance-based gains of USD0.8 billion were recorded.
Asian hedge funds posted their third consecutive month of losses in April, down 0.12 per cent. On a year-to-date basis, Asian managers lost 0.03 per cent, with weaknesses led by Japan and India mandated hedge funds which were down 1.69 per cent and 1.19 per cent respectively.
Asset base for the USD1.65 trillion North American hedge fund industry grew by USD18.4 billion over the year, with most of this growth attributed to investor allocations of USD22.1 billion year-to-date, while performance-based losses totalling USD3.7 billion were recorded.
The Eurekahedge Crypto-Currency Hedge Fund Index rebounded to positive territory in April, up 45.43 per cent, while its 2018 year-to-date figure is still in the red, down 21.87 per cent. In contrast, bitcoin has lost over 26 per cent over the same year-to-date period.
While hedge funds with exposure into Latin America posted impressive returns this year, launch activity has been rather muted. Closures have outpaced launches annually from 2011 to 2018 year-to-date, with a total of 236 closures and 127 fund launches during this period. For more details, see the 2018 Key Trends in Latin American Hedge Funds report.