Hedge funds had their second straight month of losses in April, though industry-wide assets under management continued to grow due to strong inflows. The Eurekahedge Hedge Fund Index lost 0.13%, but is still up 0.78% for the year, just ahead of the MSCI World’s 0.75% YTD growth. Net assets inflows of $13.2 billion overshadowed $2.7 billion in performance-based losses, pushing AUM to $2.09 trillion, according to a Eurekahedge Report released today.
Hedge funds continue to outperform in North America, Europe stumbles
Hedge funds with a North American mandate outperformed other regions by a fair margin, gaining $1.4 billion, and tied Europe for the highest net inflows with $4.7 billion. Europe was the worst performing region, with performance losses hitting $1.1 billion, but it still has the second highest YTD returns (0.76% compared to 2.2% for North America). Both Japan and Asia ex-Japan were flat in April performance wise and had nearly flat inflows, picking up $100 million in each region.
Latin America returned $200 million but also had $200 million net outflows, leaving total assets unchanged. This could simply be a sign that investors are happy with the amount of exposure they have to Latin America and have decided to take profits when returns are positive.
Hedge Fund Long/short loses big in April
Long/short strategies were the only category to lose money in April, but their $2.9 billion drop was enough to wipe out gains for the rest of the industry. Europe and Asia ex-Japan were hardest hit, losing 1.10% and 1.06% respectively. Nonetheless, long/short strategies had the second highest inflows at $3.8 billion. Fixed income had an impressive $6 billion in net inflows last month with $300 million in returns, making it the biggest AUM gainer in April. The second biggest gainer were multi-strategy funds that had both $1.8 billion in returns and $1.9 billion in net inflows.
While distressed debt was nearly flat, gaining 0.01%, it was also the strategy’s tenth consecutive month of positive returns putting them up 3.05% for the year. Macro is the only strategy that is down for the year, losing 1.04%. A $500 million gain in April wasn’t enough to counteract $1 billion in outflows as investors lose some faith in macro.
Event driven funds were up 1.48% in Asia ex-Japan, 0.75% in North America, and 0.56% in Europe, but big losses in Japan and Latin America meant that the strategy only picked up $300 million worldwide compared to $1.4 billion in outflows.