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Emerging markets focused hedge funds post fifth consecutive month of losses


Hedge funds were down 0.32 per cent in June ending the first half of 2018 on a flat note with a 0.06 per cent gain. In contrast, the MSCI World Index (Local) was down 0.01 per cent as of June 2018 year-to-date.

On a year-to-date basis, 5 per cent of hedge fund managers have posted double digit gains, mostly concentrated on the North American long/short equities mandate. In contrast, almost 15 per cent of fund managers posted double digit gains over the same period last year.
 
North American fund managers topped the table among geographic mandates, gaining 0.25 per cent supported by the region's equity markets which resisted the downward pressure inflicted by the US-China trade spat during the month. The S&P 500 index gained 0.48 per cent in June, while the tech-heavy NASDAQ index was up 0.92 per cent.
 
Greater China focused hedge funds were down 4.18 per cent as the weakening of Chinese Yuan and poor performance of Chinese equity markets weighed down on their returns. The Hang Seng Index slipped 4.97 per cent in June, while the CSI 300 index which tracks major stocks listed in the mainland exchanges was down 7.66 per cent over the same period.
 
Across strategic mandates, event driven funds lead with their 1.22 per cent return over the month, bringing their year-to-date return to 2.63 per cent. On the other hand, CTA/managed futures hedge funds lost 0.59 per cent in June, pushing their year-to-date performance further into the red (-2.43 per cent).
 
The Eurekahedge Relative Value Hedge Fund Index rallied 1.08 per cent in June, despite the poor performance of the underlying sub-indices. Long volatility, short volatility and tail risk hedge funds posted losses of 1.04 per cent, 1.55 per cent, and 2.94 per cent respectively over the month.
 
Contrary to the trend observed in May, hedge fund managers overseeing larger assets outperformed their smaller peers in June. The Eurekahedge Billion Dollar Hedge Fund Index gained 0.33 per cent over the month, while on the other hand small hedge funds managing up to USD100 million in assets posted losses of 0.39 per cent over the same period.
 
AI hedge funds posted losses for the third consecutive month, down 0.60 per cent in June. This loss brought their year-to-date return down to -3.11 per cent, placing them behind all of the primary strategic mandates.
 
The Eurekahedge Crypto-Currency Hedge Fund Index which tracks 16 hedge funds investing in crypto assets was down 11.02 per cent in June amidst difficult crypto-currency market situation, yet still outperforming major crypto-currencies such as Bitcoin, Bitcoin Cash and Ethereum, which were down 14.69 per cent, 26.45 per cent and 21.50 per cent respectively over the month.

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