Mixed returns for hedge funds in November as US and Asia recover but European managers sink over Italy and Brexit

The Eurekahedge Hedge Fund Index was down 0.17 per cent in November, trailing the global equity market as represented by the MSCI AC World Index (Local) which edged 1.11 per cent higher, according to the company’s lastest Index Flash Update.

Roughly 23.2 per cent of the hedge fund managers tracked by Eurekahedge outperformed the market index in November.

On an asset-weighted basis, hedge funds lost 0.73 per cent in November, bringing their year-to-date losses to 3.79 per cent, as captured by the Mizuho-Eurekahedge Hedge Fund Index (USD). North American hedge funds meanwhile, gained 0.89 per cent in November, on the back of the underlying equity market rally in response to Powell's remark that the Fed rates are 'just below' the neutral level.

Over in Asia, optimism over a slower pace of rate hikes in the US boosted the region's equity markets and currencies. The Eurekahedge Asia ex Japan Hedge Fund Index was up 1.77 per cent, with a sizeable portion of the gains concentrated among fund managers focusing on India (5.80 per cent) and Greater China (2.67 per cent).

The Eurekahedge European Hedge Fund Index slumped 1.03 per cent in November, with the underlying long/short equities mandate down 1.46 per cent as the region's equity markets remained vulnerable to uncertainties surrounding Brexit negotiation and Italy's debt levels.

Performance across strategic mandates was a mixed bag in November, with arbitrage hedge funds leading the pack by gaining 4.86 per cent over the month. On the other end of the spectrum, distressed debt hedge funds were down 1.66 per cent, dragged by the weakness in high yield market.

The Eurekahedge CTA/Managed Futures Hedge Fund Index was down 0.23 per cent during the month as plummeting oil and overall weakness in the energy sector weighed on fund managers’ performance. On a year-to-date basis, the index was down 4.21 per cent and the mandate has suffered US$12.2 billion of performance-based losses and USD18.5 billion of net investor 

Fund managers utilising AI/machine learning strategies were up 2.09 per cent in November, ending their streak of losses which placed them on track to record their worst year since the inception of the Eurekahedge AI Hedge Fund Index. On a year-to-date basis, the index is still down 4.50 per cent.

The Eurekahedge ILS Advisers Index was down 4.24 per cent as the catastrophic losses incurred by Hurricane Florence and Hurricane Michael weighed on ILS fund managers’ returns. On a year-to-date basis, ILS fund managers were down 3.55 per cent, firmly placing 2018 as the second worst year for the Eurekahedge ILS Advisers Index right next to 2017.

The Eurekahedge Crypto-Currency Hedge Fund Index meanwhile, was down 10.88 per cent in November, as Bitcoin price crashed below the USD4,000 level nearing the end of the month. The index has lost 61.47 per cent of its value since the end of 2017.

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