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Hedge funds up 0.89 per cent in March, says Eurekahedge

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The Eurekahedge Hedge Fund Index gained 0.89 per cent in February, bringing its year-to-date return to 3.26 per cent, according to the March 2019 Eurekahedge Report.

The risk-on sentiment among investors driven by the Fed’s patient stance and optimism over the potential resolution of the US-China trade tension persisted through the month, sending global equity markets on a rally through February.

The global hedge fund industry saw performance growth totalling USD39.5 billion over the first two months of 2019, supported by the global equity market performance since the beginning of the year. Despite the positive performance figures, net investor redemptions stood at USD15.1 billion over the same period.

The Eurekahedge Fixed Income Hedge Fund Index gained 0.61 per cent in February, as growth forecast cuts among the developed economies led to lower bond yields, resulting in strength in the government and high-yield bond markets. The fixed income strategic mandate was up 2.29 per cent year-to-date, with all of its underlying mandates in positive territory.

Hedge fund managers utilising CTA/managed futures strategies were up 0.37 per cent in February, with mixed returns among the underlying regional mandates. Rising oil prices resulting from the OPEC’s production cut and a drop in the US crude supplies contributed to the strategy’s performance during the month. On a year-to-date basis, the Eurekahedge CTA/Managed Futures Hedge Fund Index was up a meagre 0.16 per cent.

Fund managers utilising AI/machine learning strategies were down 0.32 per cent in February, dragging their year-to-date returns to 2.02 per cent. Quant strategies continued to fall out of investors’ favour, with the CTA/managed futures mandate seeing investor redemptions totalling USD29.0 billion in 2018 and USD4.0 billion as of February 2019 year-to-date.

The Eurekahedge Crypto-Currency Hedge Fund Index gained 12.74 per cent in February, recording its best month in nearly a year. Roughly half of the underlying crypto-currency hedge funds managed to outperform Bitcoin which gained 9.65 per cent during the month.

The Eurekahedge Greater China Long Short Equities Hedge Fund Index was up 8.31 per cent over the first two months of 2019, supported by the underlying region’s equity market rally which resulted from investor optimism over the US-China trade negotiations and the Fed’s dovish stance.

The Greater China hedge fund industry’s asset currently stands at USD28.7 billion, marginally up from the USD28.0 billion figure by the end of 2018. Hedge fund managers focusing on the region were hit particularly hard by the aggressive Fed rate hikes and the US-China trade friction in 2018, as indicated by the USD2.3 billion of performance-based losses recorded during the year. Despite that, investor allocations toward the region remained robust, as the industry saw USD1.0 billion of net inflows in 2018.

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