Hedge funds down in June, YTD returns flat
Hedge funds were down 0.34 per cent in June with H1 2018 almost flat, with a 0.08 per cent gain year-to-date, according to the latest Eurekahedge Report. This would be the weakest first half performance of hedge funds on record since 2000.
The strongest gain occurred in H1 2009 when hedge funds gained 10.62 per cent while the next weakest H1 performance came in H1 2010 when managers posted gains of 0.91 per cent.
Total hedge fund assets grew by USD8.8 billion over the past six months, which compares with a growth in total AUM of USD98.5 billion over the same period last year.
Rising US-China trade war tensions and a strengthening US dollar have spelled trouble for Asian hedge fund managers in H1 2018. Greater China focused mandates are down 0.44 per cent, though outperforming the Shanghai and Shenzhen composites by well over 10 per cent. Korea mandated hedge funds are down 4.21 per cent over the same period, ahead of the Kospi Index which is down 5.73 per cent. Meanwhile India mandated hedge funds have struggled with losses of 5.26 per cent, underperforming the BSE Sensex Index by 9.27 per cent in the first half of 2018.
Assets under management for CTAs have shrunk by 9.81 per cent in 2018 as underlying managers posted their fifth consecutive month of investor redemptions with net outflows totalling USD7.1 billion.
Event driven hedge funds remain the bright spot across all strategic mandates in H1 2018, posting performance based gains of USD3.3 billion and attracting net investor inflows of USD4.4 billion. The Eurekahedge Event Driven Hedge Fund Index is up 2.59 per cent year-to-date with underlying Asian event driven managers up 8.26 per cent for the year.
Across regional mandates, European hedge funds have posted a small decline in assets under management to the tune of USD5.9 billion. North American hedge funds have had the strongest showing for this year seeing AUM grow by USD11.9 billion. Meanwhile emerging markets focused hedge funds have seen their assets decline by USD6.8 billion.
Asian hedge funds have continued their struggle in H1 2018 with losses of 0.61 per cent, though outperforming underlying markets as the MSCI AC Asia Pacific Index (Local) posted losses of 3.47 per cent. Japan mandated hedge funds are down 2.70 per cent in H1 2018, ahead of the 4.77 per cent loss posted by underlying markets as captured by the Tokyo Topix Index.