Eurekahedge: Hedge Funds Start Second Half on Positive Note

Aug 12 2015 | 1:59pm ET

Hedge funds started the second half of 2015 on a positive note, according to a flash update of the Eurekahedge Hedge Fund Index. The index booked a gain of +0.38% in July, compared with 1.34% earned by the MSCI World Index over the same period. 

Market sentiment improved as the impasse in Greek debt negotiations was resolved and Chinese equity markets showed some signs of bottoming out following intervention by regulators, noted Eurekahedge. The measure had lost -1.26% in June to close out the first half up 3.31%.

On a year-to-date basis, hedge funds are up 3.68%, which compares with a gain of 2.94% seen over the same period last year.

Other key aspects of the update:

  • Total industry AUM has grown by US$100 billion in 2015, with roughly half of this growth coming from new investor allocations.
  • European hedge funds posted the best returns among all regional mandates with gains of 1.03% in July and 5.48% year-to-date.
  • North American managers were up 0.75% during the month, bringing their year-to-date gains to 3.20% and outperforming the S&P 500’s 2.18%.
  • Japanese hedge funds posted their sixth consecutive month of positive returns for the year, gaining 0.62% in July and now up 5.95% year-to-date as the yen depreciated another 1.22% against the dollar in July and the underlying Japanese equity markets posted gains. 
  • The Eurekahedge Long/Short Equity Hedge Fund Index is up 5.98% year-to-date, leading all strategic mandates and surpassing its 2014 gains of 3.41%. It is also outperforming the MSCI AC World Index, which is up 5.10% in the first seven months of 2015.
  • Managers focused on China posted their worst monthly loss since January 2008, losing 8.33% in July, but are still up 10.84% year-to-date. 
  • In other emerging markets, Asia ex-Japan hedge led with losses of 2.22%, though outperforming underlying markets as the MSCI Asia ex Japan3Index declined 3.64% during the month. Greater China mandated hedge funds posted their worst losses for the year, down 8.33% as Chinese equity markets saw steep declines.
  • On a year-to-date basis, Asia ex-Japan mandated hedge funds lead with returns of 9.87% and have outperformed the MSCI Asia ex Japan Index by 8.74% for the year.
  • In terms of strategies, CTA/managed futures and macro strategies delivering the best returns in July while distressed debt mandates floundered. The Eurekahedge CTA/Managed Futures Hedge Fund Index was up 1.20% during the month with managers reporting strong gains from their short exposure to energy, while the S&P Goldman Sachs Energy Total Return Index declined 17.38% during the month as oil prices fell. 
  • Macro strategies were the next best performers, up 0.71% during the month with gains coming from exposure to developed market equities and a rally in bonds.
  • Distressed debt strategies posted their third consecutive month of losses and were down 0.68% in July as losses accrued from holdings of corporate debt of companies in the energy sector.

Eurkahedge’s flash update data is based on 40.99% of funds that have reported July 2015 returns as at 12 August 2015.

Eurekahedge tracks asset flows, hedge fund performance and regional key trends across the hedge fund universe. The firm's database tracks more than 130 data points on more than 24,000 alternative funds.

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