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Asia Pacific Intelligence

Eurekahedge Hedge Fund Index reports gains of 0.22% in February, 2.33% year to date

Tuesday, April 09, 2013

(This piece originally appeared in Opalesque's AMB)

The March issue of the Eurekahedge Report reveals that the hedge fund sector has more than $1.8tln under management and enjoyed positive returns across all regions in 2012 - with Asia ex-Japan as the best performing with 12.14% of gains.

Other key highlights from the Eurekahedge monthly report include:

  • The Eurekahedge Hedge Fund Index was up 0.22% in February and is up 2.33% year to date
  • 23% of early reporting funds attracted assets in February
  • The Eurekahedge Japan Hedge Fund Index crossed the 200-point mark for the first time to reach its highest level on record
  • Japanese hedge funds witnessed the strongest three month return on record, up by 11.27%
  • Nearly 250 hedge funds are up more than 10% so far this year
  • Updated figures for January show that the industry grew by $30bn during the month, bringing the industry back above the $1.8tln mark
  • European hedge funds outperformed underlying markets by 3.42% in February
  • Event driven hedge funds witnessed the ninth consecutive month of positive returns - up nearly 10% since June last year
  • The first two months of 2013 have seen nearly 50 funds launching globally
  • Assets in Latin American hedge funds have increased by 5% in the first two months of 2013
  • AUM of North American hedge funds currently at $1.24tln, expected to cross the historical high of $1.25tln in March

The performance update for February hedge funds finds that after a strong showing in January on the back of resurgent risk appetite and rallying markets, hedge funds delivered a more muted performance in February as risk aversion increased during the month. The Eurekahedge Hedge Fund Index was up 0.22% during the month, outperforming the underlying markets which finished in negative territory. The MSCI World Index was down 0.07% in February.

The firm writes that February witnessed diverging trends among global markets with US and European indices finishing with contrasting results. Risk aversion increased during mid-month and the S&P dropped below the 1500 mark in the third week of February as developments from Europe effected confidence globally. Economic contraction in Europe along with political uncertainty in Spain and Italy dampened some of the bullishness across the board. Although North American bourses rebounded at month-end to finish in the black, European indices finished with losses.

Managers across all major hedge fund regions posted profits during the month, according to Eurekahedge. Asian hedge funds provided the strongest returns in February - Japanese managers were up 2.51% as the underlying markets continued to rally, although most of the gain was made on the last day of the month. The promise of Prime Minister Abe's policies have delivered strong gains to the Japanese market and the momentum looks set to continue for a while, certainly Abe seems convinced of this as he reflected at the CSIS forum that "Japan is back" and the market is following suit. The Eurekahedge Japan Hedge Fund Index has climbed to its historical high, crossing the 200 point marking and gained 10.50% over the last three months, making it the strongest three months on record for the index.

Asia ex-Japan managers also closed the month with gains of 0.57% while the underlying equity markets finished the month with gains of 0.73%. The region's long/short equity funds delivered the strongest returns during the month, up by 0.80%. European hedge funds also posted positive returns of 0.68% for the month, outperforming the underlying markets by almost 3.42%. European markets declined as the debt issues once again came to the fore - driven primarily by the results of Italian elections. Long/short equity and European macro managers reported gains for the months. North American managers continued to make hay as the markets shrugged off European concerns amid a slew of positive economic data.

This article was published in Opalesque's Asia Pacific Intelligence our monthly research update on alternative investments in the Asia-Pacific region.
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