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Asia Ex-Japan Leads With 6.94% YTD As Hedge Funds End Losing Streak

Asia Ex-Japan Leads With 6.94% YTD As Hedge Funds End Losing Streak by Eurekahedge

Hedge funds reversed their four month losing streak with the Eurekahedge Hedge Fund Index up 1.33%1 in October while the MSCI World Index2 climbed 7.22% during the month. On a year-to-date basis, hedge funds are up 1.77% while underlying markets as represented by the MSCI World have gained 1.40%.

October was dominated by resurgence in equity markets across the board as investor sentiment showed signs of improvement, helped largely by accommodating views aired by key central banks. The ECB and BOJ in particular remain dovish, reiterating their intent to meet their inflation targets as part of their broader strategy to support growth in their respective economies. On the other hand, the Fed appears to be hinting at a long overdue rate hike in December which seems likely given the encouraging employment numbers coming out from the US as well as the stabilizing outlook overseas – mainly China which appears to have weathered the worst for the moment. B?

Key takeaways for the month of October 2015:

  • On a year-to-date basis, hedge funds are up 1.77%, which compares with a gain of 3.52% seen over the same period last year.
  • Total industry AUM has increased by US$95 billion as of October 2015 YTD, almost US$10 billion lower compared to the same period last year. However, capital inflows have accounted for almost 73% of this growth as net investor flows for the year stand at US$70 billion in comparison to US$50 billion over the same period last year
  • Among developed market investment mandates, Japanese and European managers lead with year-to-date gains of 4.93% and 4.19% respectively, while North American hedge funds trail behind with gains of 0.52%.
  • Greater China investing hedge funds were up 4.84% in October and 8.86% year-to-date, outperforming the CSI 300 Index by almost 9%.
  • On a year-to-date basis, distressed debt funds have posted the worst return among all hedge fund strategic mandates, down 3.13% and are on track to post their worst performance since 2008.
  • Asia ex-Japan hedge funds were up 3.13% in October and 6.94% year-to-date – the best return among all hedge fund regional investment mandates. In comparison, the MSCI AC Asia ex Japan is down 3.84% year-to-date.
Main IndicesOct 20151Last 3 Months2015 Returns2014 ReturnsAnnualised ReturnsConstituentsWeighting
Eurekahedge Hedge Fund Index1.33-1.411.774.569.20%2,931Equal
Eurekahedge 500.60-1.900.333.045.73%50Equal
Eurekahedge Long Short Equities Hedge Fund Index2.53-1.733.323.488.93%1,156Equal
Eurekahedge Greater China Hedge Fund Index4.84-0.978.867.6015.91%79Equal
Index of the MonthOct 20151Last 3 Months2015 Returns2014 ReturnsAnnualised ReturnsConstituentsWeighting
CBOE Eurekahedge Relative Value Volatility Hedge Fund Index1.650.345.36-0.3610.11%41Equal

Main Indices

Eurekahedge Main IndicesOct 201512015 Returns2014 Returns
Eurekahedge Hedge Fund Index1.331.774.56
Eurekahedge Fund of Funds Index3.322.673.45
Eurekahedge Long-only Absolute Return Fund Index4.87-0.533.50
Eurekahedge Islamic Fund Index2.54-0.172.62

Regional Indices

All regional mandates ended October in positive territory with Eastern Europe & Russia mandated funds witnessing the largest gains. The Eurekahedge Eastern Europe and Russia Hedge Fund Index was up 4.41% during the month as underlying markets posted strong gains with the RTS Index gaining 7.07% during the month. Asia ex-Japan investing funds were up 3.13%, while the MSCI AC Asia ex Japan Index gained 5.78%. On a year-to-date basis, the Eurekahedge Asia ex Japan Hedge Fund Index is up 6.94%, the highest gains among all regional mandates and an outperformance of almost 11% relative to the underlying markets represented by the MSCI Asia ex Japan Index. The Eurekahedge Greater China Hedge Fund Index continued its recovery posting its second consecutive month of gains and was up 4.84% in October with underlying Chinese equity markets posting strong double digit gains as they bounced back from their August lows. On a year-to-date basis, Greater China investing hedge funds have preserved their gains from earlier during the year and are up 8.86%, outperforming the CSI 300 Index by almost 9%. Within the developed market mandates, North American hedge funds posted the strongest gains, up 1.94% followed by European mandates up 1.38% while Japan dedicated funds came in a close third with gains of 1.30%.

Eurekahedge Regional IndicesOct 201512015 Returns2014 Returns
Eurekahedge North American Hedge Fund Index1.940.525.44
Eurekahedge European Hedge Fund Index1.384.190.67
Eurekahedge Eastern Europe & Russia Hedge Fund Index4.412.97-23.89
Eurekahedge Japan Hedge Fund Index1.304.935.76
Eurekahedge Emerging Markets Hedge Fund Index2.813.543.54
Eurekahedge Asia ex Japan Hedge Fund Index3.136.949.06
Eurekahedge Latin American Hedge Fund Index1.761.152.19

Strategy Indices

All strategic mandates, with the exception of CTA/managed futures ended the month of October in positive territory. Event driven managers posted the strongest returns among all hedge fund strategies, gaining 2.66% following four consecutive months of losses as a pick-up in global M&A activity in key sectors such as healthcare and technology helped managers??portfolios. Long/short equities funds were up 2.53% in October as global equity markets posted a strong recovery, with strong gains realized across both emerging and developed market mandated equity strategies. CTA/managed futures strategies, which had earlier posted gains in September, were down 0.99%, with trend following strategies posting losses on average down 0.86%. On a year-to-date basis, distressed debt funds have posted the worst return among all hedge fund strategic mandates, down 3.13%, followed by CTA/managed futures strategies at -0.93%.

Eurekahedge Strategy IndicesOct 201512015 Returns2014 Returns
Eurekahedge Arbitrage Hedge Fund Index1.835.522.71
Eurekahedge CTA/Managed Futures Hedge Fund Index-0.99-0.939.21
Eurekahedge Distressed Debt Hedge Fund Index0.23-3.130.79
Eurekahedge Event Driven Hedge Fund Index2.66-0.232.53
Eurekahedge Fixed Income Hedge Fund Index2.111.973.61
Eurekahedge Long Short Equities Hedge Fund Index2.533.323.48
Eurekahedge Macro Hedge Fund Index0.991.524.19
Eurekahedge Multi-Strategy Hedge Fund Index1.162.044.56
Eurekahedge Relative Value Hedge Fund Index0.211.463.85
CBOE Eurekahedge Long Volatility Hedge Fund Index0.662.181.58
CBOE Eurekahedge Relative Value Volatility Hedge Fund Index1.655.36-0.36
CBOE Eurekahedge Short Volatility Hedge Fund Index2.433.214.47
CBOE Eurekahedge Tail Risk Hedge Fund Index2.34-0.89-3.22

 

Eurekahedge Global Hedge Fund Indices by Fund SizeOct 201512015 Returns2014 Returns
Eurekahedge Small Hedge Fund Index (< US$100m)1.411.404.38
Eurekahedge Medium Hedge Fund Index (US$100m – US$500m)1.302.964.64
Eurekahedge Large Hedge Fund Index (> US$500m)0.532.325.29
Eurekahedge Billion Dollar Hedge Fund Index0.351.584.75

 

Mizuho-Eurekahedge IndicesOct 201512015 Returns2014 Returns
Mizuho-Eurekahedge Index – USD0.56-0.131.18
Mizuho-Eurekahedge TOP 100 Index – USD0.321.082.32
Mizuho-Eurekahedge TOP 300 Index – USD0.370.401.77

 

Asia-Eurekahedge IndicesOct 201512015 Returns2014 Returns
Eurekahedge Greater China Hedge Fund Index4.848.867.60
Eurekahedge India Hedge Fund Index0.683.6338.84

* Based on 40.98% of funds which have reported October 2015 returns as at 11 November 2015

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1 Based on 40.98% of funds which have reported October 2015 returns as at 11 November 2015

2 MSCI AC World Index (Local)