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Eurekahedge: Hedge funds up 0.47% in August as market sentiment remained optimistic (+3% YTD)

Tuesday, September 11, 2012
Opalesque Industry Update - Hedge funds posted another month of positive returns for August as the Eurekahedge Hedge Fund Index gained 0.47%1 during the month. Market sentiment was optimistic for most of the month, with prospects for QE3 increasing, positive signals from the Euro zone and stronger US economic data. The MSCI World Index was up by 1.64%2 in August.

Key takeaways for the month of August 2012:

  • Hedge funds gained 0.47% in August and were up 3% year-to-date.
  • Relative value hedge funds were up 7.34% August year-to-date and have attracted significant assets in 2012 – total AUM now stands at US$60 billion.
  • Event driven posted their best return in six months – the Eurekahedge Event Driven Hedge Fund Index was up 1.65%.
  • Distressed debt hedge funds also saw their best results in six months with the Eurekahedge Distressed Debt Hedge Fund Index gaining 1.07%.
  • The Mizuho-Eurekahedge Emerging Markets Index rose 1.63% in August.
  • CTA/managed futures funds have witnessed six months of net negative asset flows, losing US$16 billion since February 2012.

Regional Indices

Most regional mandates finished the month in positive territory with managers allocating to the Americas leading the way. The Eurekahedge Latin American Hedge Fund Index was up 1.09% while North American managers gained 1.02% during the month. Although the markets posted a drop at the start of the month due to uncertainty about the Euro zone's bond buying program, the trends reversed quickly on the back of positive comments from the ECB and strong US economic data. Positive sentiments regarding QE3 added further steam to the rally – the S&P500 was up 1.98% during the month.

European managers also posted a positive return of 0.62% amid healthy returns in underlying markets – the MSCI Europe Index3 was up 2.10%. Risk appetite was up during the month mostly through policy action expectation. Emerging markets and Asia ex-Japan hedge funds also finished the month in positive territory with gains of 0.88% and 0.63% respectively.

Strategy Indices

Most strategies were positive in August amid strong trends across a number of sectors. Event driven and distressed debt hedge funds posted their best returns in six months as market sentiment remained buoyant through most of the month. The Eurekahedge Event Driven Hedge Fund Index was up 1.65% in August while the Eurekahedge Distressed Debt Hedge Fund Index gained 1.07%. CTA/managed futures funds witnessed losses of 0.63% as some funds lost out on currency trades. Trend following strategies posted negative returns for the month with short-term systematic and fx traders seeing the largest losses.


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