Hedge Funds Total AUM Stands At A Record High Of US$2.23 Trillion by Eurekahedge

Key highlights for May 2015:

  • Hedge fund assets under management have increased by US$92 billion in the first five months of 2015, with one-third of this increase coming from new investor allocations. Total industry AUM stands at a record high of US$2.23 trillion.
  • Asia ex-Japan investing funds have delivered the best 2015 year-to-date returns globally, returning 15.0% and have grown their asset based by US$15.4 billion since the start of the year, bringing the region’s current AUM to a record high of US$159.8 billion.
  • European hedge funds are up 5.54% year-to-date, following dismal gains of 0.56% in 2014. Total assets under management have increased by US$20.1 billion since the start of the year helped by US$7.4 billion in new investor allocations.
  • Long/short equities hedge funds performed the best for May and 2015 year-to-date across all strategic mandates reporting 1.47% and 7.31% respectively.
  • North American managers lead in terms of year to date net investor inflows recording US$17.5 billion in new allocations, about half the level seen for the same period last year.

Hedge funds posted their fifth consecutive month of gains, returning 0.54% in May, while the MSCI World Index was up 0.81%. Asian hedge funds were strong performers this month with both Japanese and Asia ex -Japan hedge funds outperforming underlying markets. Japan mandated funds reported gains of 2.06%, followed by Asia ex-Japan mandated funds which were up 1.81% during the month. Indeed, good performance of Asian hedge funds was backed by strong equity market performance in the region. Japanese equity markets performed well during the month with the Nikkei 225 and the Tokyo Topix posting gains of 5.34% and 5.08% respectively. In China, the Chinese equity market posted double digit gains this month for the Shanghai and Shenzhen Composite Indexes, returning 16.42% and 31.50% respectively. Meanwhile, potential signs of recovery in the European market contributed to some investor optimism as inflation rate exceeded expectations in May 2015. Seen below, Europe mandated funds came in third this month with gains of 0.63%.

April and May 2015 returns across regions

Hedge Funds

Japanese managers were among the best performers of the month with gains of 2.06%, bolstered by optimism in the Bank of Japan’s (BOJ) strong commitment to achieve its inflation rate target and good performance of the Nikkei 225 constituents during the month. With gains of 2.24%, Japanese long/short equity funds performed well on the back of strong gains in underlying equity markets. On the whole, the Eurekahedge Japan Hedge Fund Index is up 5.22% for 2015.

Asia ex-Japan managers were also among the best performers this month with gains of 1.81%. Riding on market optimism in the Chinese equity market, hedge funds with a Greater China mandate posted gains of 3.36% during the month. On a year- to-date basis, Asia ex-Japan managers have delivered the best gains among the broader regional mandates and are up 15.00%, largely boosted by stellar performance of Greater China mandated funds which have posted year-to-date gains of 25.91%. Indian mandated hedge funds have also performed well with gains of 3.24% in May and a year- to-date gain of 5.66%. With year-on-year Indian GDP growth rates outstripping those of China as of Q1 2015, we can expect the rally in Indian equity markets to continue to provide support to the country’s long-biased equity hedge funds.

A positive inflation rate in May 2015 and improved expectations regarding the Eurozone economy-led Europe mandated hedge funds to place third this month with gains of 0.63%. On a year- to-date basis, Europe mandated funds came in second among the regional mandates, posting gains of 5.54%, as seen below.

2015 year-to-date returns across regions

Hedge Funds

Mizuho-Eurekahedge Asset Weighted Index

The asset weighted Mizuho-Eurekahedge Index was flat to marginally negative in May, down 0.02% as its heavy weight macro and CTA/managed futures strategy funds struggled to post positive returns during the month. It should also 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. In May, the US dollar Index was up 2.21%.

The Mizuho-Eurekahedge Multi Strategy Index was the best performer registering gains of 0.70% in May, followed by the Mizuho-Eurekahedge Asia Pacific Index which was up 0.10% during the month. On a year-to-date basis, the Mizuho-Eurekahedge Asia Pacific Index is the best performer with gains of 9.43%, followed by the Mizuho-Eurekahedge Multi Strategy Index which posted year-to-date gains of 4.98%. The Mizuho-Eurekahedge Emerging Markets Index was the worst performer this month with a loss of 2.94% as the index’s Latin America and Eastern Europe & Russia mandated constituents weighed down on returns. On a year-to-date basis, the latter performed the worse yet again with a loss of 3.01%; with currency conversion losses for non-USD denominated funds weighing in on returns as the USD Index has gained 7.35% May year-to-date.

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

Summary monthly asset flow data since January 2012

Hedge Funds

1 Based on 45.57% of funds which have reported May 2015 returns as at 11 June 2015

2 MSCI World Index All Core (Local)