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Eurekahedge Hedge Fund Index up 2.06% in February (4.30% YTD)

Thursday, March 08, 2012

Opalesque Industry Update - The Eurekahedge Hedge Fund Index was up 2.06% in February as optimism about European debt and strengthening global economy fueled rallies in the underlying markets. The MSCI World Index gained 4.55% as high risk appetite continued for the second month running. All regions and strategies finished the month with positive returns while the asset-weighted Mizuho-Eurekahedge Index was also up 1.64% in February.

Key highlights for February 2012:

  • The Eurekahedge Hedge Fund Index is up 4.30% for the first two months of the year, meaning the industry is enjoying its strongest start to a year in 12 years.
  • Hedge funds saw US$20 billion in net positive asset flows during January and February 2012.
  • Long/short equity funds have gained 6.2% year-to-date as of the end of February.
  • The asset weighted Mizuho-Eurekahedge Asia ex-Japan Hedge Fund Index is up nearly 10% in 2012.
  • Eastern Europe & Russia investing hedge funds are on a strong run in 2012, with returns up an impressive 12.57%.

Regional Indices
All regional mandates finished the month with positive returns with managers investing in Eastern Europe & Russia and Asia ex-Japan witnessing the largest gains. The Eurekahedge Eastern Europe & Russia Hedge Fund Index was up 6.10% in February, bringing its year-to-date (YTD) return to a substantial 12.57%. In addition to the overall positive global economic view, the underlying markets have benefitted from constructive moves by regional governments while managers investing in the region also gained from the sharp gains in the local currencies against the greenback.

Asia ex-Japan hedge funds delivered a 4.40% return for the month, bringing their February YTD figure to 8.84%. The regional managers have profited from a strong performance in the consumer and industrial sectors while also profiting from strengthening local currency exposures. The asset-weighted Mizuho-Eurekahedge Asia ex-Japan Index is up 9.55% February YTD, showing that larger funds have outperformed over the last two months.

Notable among other regions is the performance of European hedge funds, the Eurekahedge European Hedge Fund Index was up 5.14% February YTD as heightened risk appetite and improving sentiment about the European debt situation led to healthy performance in the underlying markets. Additionally, early reports indicate that European hedge funds have also started to attract capital from investors, implying that confidence in the region is returning.

Strategy Indices
Hedge funds with exposure to equities raked in the largest gains in February with long/short equity managers gaining 2.92%, event driven hedge funds up 2.44% and multi-strategy managers posting returns of 2.21% for the month. Sustained rallies in the equity markets (driven by strong corporate earnings and improving US economic indicators) provided equity managers with a healthy profit-making environment. The S&P 500 gained 4.06%, bringing its YTD return to 8.59% - the best first two months of the year since 1991. Long/short equity mangers captured most of the gains on offer during January and February, with their YTD return standing at 6.17%. Event driven managers benefitted from investing in companies with strong balance sheets, which had a number of low-value opportunities to gain from. All other strategies also posted healthy returns for the month and remain in the black February YTD.

Eurekahedge indices are available for download here: Source

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