The Eurekahedge Hedge Fund Index was down 2.36 per cent year to date as of November 2018, in contrast to the 8.45 per cent gain made in 2017, which turned out to be the best year for hedge funds and equity markets since 2013.
That’s according to the latest Eurekahedge Report which reveals that the first quarter of 2018 saw the return of market volatility, which pushed nearly every major strategic mandate down into the red in February. CTA/managed futures hedge funds suffered the heftiest losses, with the Eurekahedge CTA/Managed Futures Hedge Fund Index down 4.12 per cent in February alone. The mandate saw performance-based losses totalling USD22.6 billion during the month.
Long/short equities mandate bore the brunt of the equity market selloff in October, with the Eurekahedge Long Short Equities Hedge Fund Index ending the month down 3.63 per cent, dragging its year-to-date return into the red for the first time in 2018. Roughly 80 per cent of the funds constituting the mandate posted losses during the month, resulting in performance-based losses of USD29.1 billion which was the steepest decline since 2008 global financial crisis, as well as investor redemptions totalling USD13.2 billion at the same time.
European hedge fund managers have been struggling under the uncertainties surrounding Brexit negotiations and Italy’s budget concerns throughout most of 2018. The Eurekahedge European Hedge Fund Index spent eight out of the first 11 months of 2018 in the red, and is on track to post its worst yearly return since the peak of the Eurozone crisis in 2011.
Hedge fund managers focusing on Asia Pacific have been suffering from the US-China tariff spat and the Fed’s rate hikes, which sent Asian equity markets and currencies plummeting. Greater China and India mandates, the two best performers in 2017, ended up at the bottom of the table this year as they posted losses of 11.47 per cent and 6.83 per cent respectively.
Fund managers utilising AI/machine learning strategies were up 1.25 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 5.27 per cent.
The Eurekahedge ILS Advisers Index declined 2.84 per cent throughout the month of November, dragging its year-to-date loss to 2.13 per cent. As the catastrophic losses incurred by Hurricane Florence and Hurricane Michael came to light, ILS funds with exposure towards the region were adversely affected.
The Eurekahedge Crypto-Currency Hedge Fund Index was down 64.90 per cent year-to-date, largely in line with how Bitcoin price has plummeted past the USD4,000 level throughout the year. Crypto-currency hedge fund managers returned 1708.50 per cent last year, owing to the gravity-defying coin prices throughout 2017.