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Hedge Fund AUM Hits A Record High Of $2.2 Trillion

Hedge Funds AUM Reach A Record High Of Nearly $2.2 Trillion by Eurekahedge

Key highlights for April 2015:

  • Hedge funds returned US$59.5 billion in performance-based gains for the first quarter of 2015, their highest Q1 gains on record since 2006 which brings the total industry AUM to a record high of nearly US$2.2 trillion.
  • Asia ex-Japan investing funds delivered the best returns globally and were up 8.26% for April, having grown their asset based by US$12.8 billion since the start of the year.
  • European hedge funds are up 0.69% and have grown their asset base by US$10.5 billion, bringing their current AUM close to a record high of US$500 billion.
  • Long/short equities funds performed the best for April and 2015 year-to-date across all strategic mandates reporting 2.40% and 5.66% respectively.
  • North American managers lead in terms of net investor inflows recording US$10.8 billion in new allocations, roughly one-third the level seen for the same period last year.

Hedge funds posted their fourth consecutive month of gains returning 0.99%[1] in April, while the MSCI World Index[2] was up 1.25%. The NYSE Composite posted gains of 1.38% as of April, despite mediocre retail sales slump figures. Investor optimism fuelled by aggressive stimulus measures by the Chinese central bank is reflected in the strong climb of the CSI 300 Index closing the month of April with gains of 17.85%. With a continued equity rally in Japan headed by Japanese pension funds and further quantitative expansion by Bank of Japan, the Nikkei 225 closed April with gains of 1.63%. Meanwhile, amid escalating pressure on the Greek government, talks on averting a government default seem farther away from reaching a conclusion as the Tsipras administration considers its options

March and April 2015 returns across regions

Hedge Funds

Asia ex-Japan managers were the best performers of the month, with gains of 8.26%. Hedge funds with a Greater China mandate posted stellar gains as investor optimism remained high following the aggressive stimulus measures introduced by the Chinese central bank. The CSI 300 Index gained 17.85% in April, outperforming its previous month of gains. The Eurekahedge Greater China Hedge Fund Index posted the best regional gain of 15.55% as of April 2015 followed by Japanese funds with gains of 1.89%, bolstered by moderate performance of Japanese equities as at April’s close.

While Japanese first quarter growth is moderate at best, the country is precariously perched between the effects of a more expansive quantitative easing versus a potential further consumption tax hike from 8% to 10% later in 2015. The first consumption tax hike seemed to have dampened the efforts of Japan’s first round quantitative easing as inflation rate has failed to hit its two-year target of 2%.

In terms of 2015 year-to-date returns, Asia ex-Japan managers remained the top performers of the month with returns of 13.41%, with much of the gains from the performance of Greater China funds. European and Japanese funds came in second and third with gains of 4.78% and 3.18% respectively. North American and Latin American funds ended in last place with 2.38% and 2.34% respectively. 

2015 year-to-date returns across regions

Hedge Funds

Mizuho-Eurekahedge Asset Weighted Index

The Mizuho-Eurekahedge Index gained 1.23% in April, pushing the index into positive territory after it declined 0.20% in March. It should be noted that the Mizuho-Eurekahedge Index is US dollar dominated, and during months of strong US dollar gains, the index results include the currency conversion loss for funds that are denominated in other currencies. Based on the April US Dollar Index, the greenback depreciated 3.59% in April.

The Mizuho-Eurekahedge Asia Pacific Index was the best performer registering 6.81% gains in April. Recovering from its losses in March, the Mizuho-Eurekahedge Emerging Markets Hedge Fund Index catapulted into the positive territory, with gains of 3.86% in April, although it should be noted that the index’s year-to-date return is still in the red with losses of 0.01%, nonetheless a marked improvement from its March year-to-date figure.

Mizuho-Eurekahedge Indices April 2015 returnsHedge Funds Mizuho-Eurekahedge Indices April 2015 year-to-date returnsHedge Funds

Summary monthly asset flow data since January 2011

Hedge Funds

 

Eurekahedge

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[1] Based on 61.36% of funds which have reported April 2015 returns as at 17 May 2015

[2] MSCI World Index All Core (Local)