Hedge funds were up for the third consecutive month in November, with the global markets maintaining their upward momentum.
According to Eurekahedge’s report for November 2013, distressed debt investing remain the best performing strategy in 2013, up 14.81% November to-date.
Eurekahedge hedge fund index surpasses MSCI world index
Eurekahedge’s recent report highlights that its Hedge Fund Index was up 1.37% during the month, surpassing the MSCI World Index which gained 1.27% during November.
Furthermore, total assets in the hedge fund industry now stand at a record level of $1.97 trillion, edging past the previous record of $1.95 trillion recorded in June of 2008.
Eurekahedge report points out global markets remained upbeat thanks to positive macroeconomic data from the U.S. with incoming Fed chair Janet Yellen’s testimony before the Senate’s Banking Committee reiterating the need for the Fed’s QE program for an enduring recovery in the US economy.
Hedge funds’ net asset flows
According to the Eurekahedge report, net asset flows for the year recorded at $122.2 billion, with net allocations to North American managers standing at $64 billion year-to-date.
European markets too were aided by the ECB’s cut in its interest rates to 0.25%, which is the lowest on record as fears surfaced over the prospects of a deflationary spiral in the Eurozone region.
The positive sentiment were echoed as European fund managers were up 7.41% in November year-to-date, witnessing net asset inflows for the year standing at $48.2 billion, which is the highest level on record.
Most regional indices post positive performance
All regional mandates, with the exception of Eastern Europe and Russia, posted positive returns with Asian hedge fund managers leading the way.
Eurekahedge report notes Asian markets too edged upwards aided by strong third quarter GDP estimates from China, with markets reacting positively as details emerged regarding the CCP’s third plenary session. Resonating the optimism, Greater China focused hedge funds outperformed the Han Seng Index by over 12% as of end-November. Further Asia ex-Japan hedge funds too posted outperformance over the underlying markets by over 10% November year-to-date.
The following table captures the performance of the regional indices:
Most strategy indices post positive returns
Like regional indices, most of the strategy indices too posted positive returns with fixed income fund managers leading the pack with returns of 7.28% during November.
However, relative value hedge fund index was the only exception, logging negative returns.
Interestingly, quite a few fixed income funds which were investing in bitcoins realized mammoth gains during November as leading central banks recognized the virtual currency as legal tender.
As reported earlier, Bitcoin hedge fund was the best-performing hedge fund year-to-date with a return of 4847% on the back of some 6000% growth in Bitcoin’s value against the dollar this year.
As evidenced in the following table, The Eurekahedge Distressed Debt Hedge Fund Index posted an impressed 14.81% return on a year-to-date, followed by Eurekahedge Fixed Income Hedge Fund Index: