Key highlights for June 2015:
- Hedge fund assets under management have increased by US$93 billion in the first six months of 2015, with roughly US$52 billion coming from performance driven gains and US$41 billion from new investor allocations.
- Despite losses of 1.13% in June, European mandates continue to see resurgence in investor allocations. European hedge funds have recorded US$12.5 billion in new investor allocations for Q2 2015 following net outflows of US$17.1 billion over the three preceding quarters.
- CTA/managed futures funds have grown their asset base by 10.86% in 2015 largely on the back of strong capital inflows totaling US$20 billion – its highest 1H investor allocation since 2008.
- Asia ex-Japan mandated hedge funds lost 1.58% in June and recorded US$1 billion worth of performance-based losses in the worst month for regional managers since the taper tantrum of 2013.
- North American managers lead in terms of year-to-date net investor inflows recording US$24.9 billion in new allocations, about two-thirds the level seen for the same period in 1H 2014.
After five months of consecutive gains, hedge funds posted their first monthly loss in 2015 of 1.19%1 in June, though comfortably outperforming underlying markets as the MSCI World Index2 fell 2.88% during the same month. Asia ex-Japan mandated hedge funds suffered their worst month of losses since June 2013, down 1.58% as Chinese equity markets entered into correction during the month. The Shenzhen and Shanghai Composite Indices declined by 11.78% and 7.25% during the month respectively. Talks between Greece and its creditors further overshadowed markets with European managers also posting losses of 1.13% during the month. Hedge fund managers with exposure to Europe suffered steep losses, due to the sell-off in European equity markets as the escalating Greek debt crisis increased market uncertainty. While Asia ex-Japan and Europe mandated funds have languished this month, Japanese and Latin American managers emerged as the top performer for the month across all regional mandates, up 0.39% and 0.29% respectively despite meek global equity performance and volatile market environment.
May and June 2015 hedge funds returns across regions
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Japanese managers were the top performers this month with gains of 0.39%, despite a retreat of the Nikkei 225 and the Tokyo Topix, which were down 1.59% and 2.58%. Indeed, the Nikkei 225 was exhibiting price volatilities during June as the stock market was not isolated from the excessive sell off in the Chinese stock market towards the month-end. As the Chinese equity market entered into correction, Japanese equity markets were not spared from the trickledown effect of stock price volatility occurring in the region. Despite this, Japanese managers were able to post positive gains during the month with managers utilising market neutral strategies coming out on top. Latin American managers were the next best performers with gains of 0.29%. Despite flat equity market performance in the Asian, European and North American regions, Latin American stock markets performed relatively well during the month with the IBOVESPA and IPC General gaining 0.78% and 0.61%. Latin A merican long/short equities managers were also the best regional performer for the long/short equities strategy this month, gaining 0.89%.
Mizuho-Eurekahedge Asset Weighted Index
The asset weighted Mizuho-Eurekahedge Index fell into negative territory in June, down 1.38% as its heavy weight CTA/managed futures and macro strategy funds were in the red, falling 4.10% and 1.88% respectively. 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 June, the US Dollar Index was down 1.47%.
The Mizuho-Eurekahedge Emerging Markets Index was the best performer registering gains of 0.79% in June, as the index Latin American mandated constituents gained on returns during the month while other regions struggled to post positive gains. However, on a year-to-date basis, the latter performed worst with a loss of 1.30%; with currency conversion losses for non-USD denominated funds weighing in on returns as the USD Index has gained 5.78% June year-to-date. On a year-to-date basis, the Mizuho-Eurekahedge Asia Pacific Index is the best performer with gains of 7.90%, followed by the Mizuho-Eurekahedge Multi Strategy Index which posted year-to-date gains of 2.32%.
June 2015 returns
June B?2015 year-to-date returns
Summary monthly asset flow data since January 2012
1 Based on 53.04% of funds which have reported June 2015 returns as at 15 July 2015
2 MSCI World Index All Core (Local)