The Eurekahedge Hedge Fund Index was up 0.31 per cent1 in August, outperforming the MSCI ACWI (Local) which ended the month down 2.37 per cent.
Tariff threats and slowing growth prompted the People’s Bank of China to allow the CNY to weaken past the symbolic 7 per USD level early into the month, which in turn resulted in the US Treasury Department labelling China a currency manipulator. The risk-off sentiment among investors during the month was mostly driven by political concerns encompassing the US-China trade war, the deteriorating bilateral relationship between Japan and South Korea, the ongoing protests in Hong Kong, and the risk of a no-deal Brexit among other things.
Returns were negative across geographic mandates in August, with North American fund managers down 0.39 per cent and Asia ex-Japan fund managers losing 1.07 per cent. Fund managers utilising equity long-bias strategies lost 2.03 per cent throughout the month, dragging their year-to-date return to 9.31 per cent.
Roughly 54.3 per cent of the underlying constituents of the Eurekahedge Hedge Fund Index posted positive returns in August, and 30.9 per cent of the hedge fund managers in the database were able to maintain double-digit returns over the first eight months of 2019.
On an asset-weighted basis, hedge funds were up 0.07 per cent in August, as captured by the Mizuho Eurekahedge Hedge Fund Index (USD). The index was up 4.76 per cent over the first eight months of the year.
North American fund managers utilising long/short equities strategy were down 1.49 per cent in August.
The Eurekahedge Greater China Long Short Equities Hedge Fund Index declined 0.13 per cent in August, outperforming the region’s weak underlying equity markets as investor sentiment was affected by the US-China trade war and the ongoing protests in Hong Kong. The mandate is still up 8.63 per cent year-to-date, owing to the strong Q1 performance of fund managers.
