• Hedge funds gained 0.50% during the month and are up 3.35% year-to-date. The US$2.26 trillion hedge fund industry grew by US$17.6 billion year-to-date, down from a US$93.4 billion growth over the same period in 2015. Fund liquidations outpaced new launches globally with a total of 548 closures for 500 launches as of 2016 year-to-date.
• Event driven hedge funds were up 0.54% during the month, and up 6.81% year-to-date as positions in M&A deals within the F&B, pharmaceuticals and technology sector lead performance. Roughly 18% of actively-reporting event driven hedge funds posted double digit returns as of 2016 year-to-date.
• On a year-to-date basis, North American hedge fund managers were up 5.40% while their European and Japanese counterparts were in the red ??down 0.46% and 2.93% respectively.
• The Eurekahedge Distressed Debt Hedge Fund Index posted the best returns among strategic mandates in September and was up 1.07% during the month. Managers also posted impressive year-to-date gains, up 8.66% – the best year-to-date returns for the strategy on record.
• Latin American long/short equities hedge funds posted the best year-to-date gains, up 20.42% while Japanese long/short equities hedge funds fared the worst, losing 2.98% over the year.
• Asia ex-Japan hedge fund managers gained 0.53% during the month, with strength being led by underlying Greater China and India mandated hedge funds which were up 0.73% and 1.82% respectively over the same period.

Hedge fund Assets Under Management- Regional Indices

On a year-to-date basis, Latin American hedge funds led the table, gaining 17.15% over the past nine months with performance held up by the region?? well-performing equity markets. Brazil?? Ibovespa Index gained 34.64% year-to-date, allowing managers to profit from their long books throughout the past nine months. Broader emerging market mandated hedge funds also posted impressive year-to-date gains, up 7.68% with performance supported by recovering oil prices and the intermittent weakness of the USD vis- C?-vis commodity currencies propping performance of underlying emerging markets commodities. North American managers were also up year-to-date, gaining 5.40% followed by Asia ex-Japan managers which posted gains of 2.39%. On the other hand, European and Japanese managers were down 0.46% and 2.93% year-to-date respectively.

Relative value hedge fund managers gained 0.72% during the month with performance supported by underlying opportunistic volatility strategies, represented by the CBOE Eurekahedge Relative Value Volatility Hedge Fund Index, which gained 0.78% over the same period. While volatility levels were subdued towards the end of the month, the VIX Index traded higher particularly in the middle of the month, before declining in the final week of September. Arbitrage managers gained 0.58%, followed by event driven hedge fund managers which were up 0.54% as exposure into M&A deals within F&B, pharmaceuticals and technology industries among performance drivers. Multi-strategy and CTA/managed futures hedge funds were also up in September gaining 0.47% and 0.33% respectively during the month. The performance of CTA/managed futures managers was led by exposure into long energy, commodities and short GBP/USD positions with underlying commodity hedge funds, represented by the Eurekahedge Commodity Hedge Fund Index gaining 0.51% while trend following hedge funds, also a sub-set of the broad CTA index, declined 1.14% during the month.

On a year-to-date basis, distressed debt hedge funds lead the table, up 8.66% followed by event driven and relative value hedge funds which gained 6.81% and 6.21% respectively as M&A activity and current price dislocations of underlying assets present ample opportunities for managers. Given that the oil recovery remain sustainable towards Q4 2016, distressed debt hedge funds could be on track as the best performing hedge fund strategy this year.