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Investor Interest in Hedge funds was strong again in August – performance positive, supported by fixed income and commodity strategies

Friday, September 10, 2010
Opalesque Industry Update - Below are early estimates for August 2010 hedge fund performance and asset flows. A full report will be available later in the month.

August highlights:
• The HFN Hedge Fund Aggregate Index was +0.41% in August and +2.16% in the first eight months of 2010. The S&P 500 Total Return Index (S&P) was -4.51% in August and -4.63% YTD.

• Hedge fund assets increased an estimated +0.86% in August to $2.268 trillion. Investor flows accounted for an estimated net increase of $6.92 billion, the third highest monthly net investor inflow in 2010. Performance added an additional $12.48 billion.

• Net investor flows in August were positive for the second positive month in a row following the industry’s first net outflow of 2010 in June. The continuation of net inflows is an important sign of support as the trend in the first half of the year was of declining rates of growth.

• Fixed income and commodity focused funds’ returns supported aggregate hedge fund performance in August. Funds investing in mortgage related securities and those with long exposure to precious metals performed best.

• Long-biased equity strategies lagged aggregate hedge fund returns in August, but the HFN Long/Short Equity Index outperformed the S&P by a large margin. Funds investing in the technology sector produced the best sector specific equity performance in August while healthcare funds trailed.

• Emerging market fund returns were mixed and aggregate returns were negative due to losses in EM equity funds.

HFN’s full August report, to be released in the third week of September, will provide details on high water marks and asset flows by strategy and region.

website: (www.hedgefund.net)
KM

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