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Eurekahedge reports hedge fund index up 3% YTD, investor appetite pick-up

Tuesday, May 16, 2017
Opalesque Industry Update - According to the May 2017 Eurekahedge Report, the key highlights for April 2017 are:

- Hedge funds were up 0.64% in April with 2017 year-to-date gains coming in at 3.00%. Investor appetite for hedge funds has picked up pace since the start of the year, with net inflows of US$34.8 billion.

- AUM for the North American hedge fund industry has reached a record high of US$1.54 trillion as of April 2017. Investor subscriptions for 2017 year-to-date stood at US$29.5 billion, with US$18.4 billion of performance-based gains recorded over the same period of time.

- The US$260.6 billion CTA/managed futures mandated hedge fund industry saw the highest net investor inflows US$11.3 billion among strategic mandates for 2017. The top 25 best performing CTA managers with a combined AUM of US$30 billion were up 4.04% for the year.

- AUM for long/short equities hedge fund managers grew by US$19.8 billion over the year with strength led by performance-driven gains of US$17.1 billion. Long/short equities hedge fund managers are up 4.81% for the year.

- Asian managers saw investor subscriptions of US$1.6 billion in 2017 year-to-date, with performance-based gains of US$4.1 billion. As of 2017 year-to-date, Asia ex-Japan managers were up 7.12% with underlying Greater China and Indian managers up 8.73% and 13.89% respectively. Japan focused funds were up 2.04% over the same period.

- European managers gained 1.10% during the month, with year-to-date gains coming in at 3.41%. The US$512.4 billion European hedge fund industry grew by US$6.5 billion as of April 2017 year-to-date.

- Sub-billion dollar hedge funds recorded strong investor interest as of 2017 year-to-date, with net inflows totaling US$16.5 billion. Within sub-billion dollar hedge funds, mid-size funds managing between US$100 million and US$500 million have seen inflows of US$12.2 billion.

***

Hedge funds posted their fourth consecutive month of gains this year, up 0.64% during the month of April, comments data provider Eurekahedge.

Meanwhile, underlying markets as represented by the MSCI AC World Index (Local) were up 1.17% over the same period. The Macron vs. Le Pen run-up to the French presidential election provided some relief for the markets especially for European equities as expectations for a Macron victory in the second round seemed likely. In the Eurozone and elsewhere in the world, economic data for Q1 2017 was largely encouraging with indicators pointing towards global economic expansion. However, strained geopolitical relationships among major powers and challenges faced by America's trade partners on the back of Trump's anti-trade rhetoric places the direction of economic recovery in a precarious position. With his proposed reforms in home ground still rather shaky, the course of Trump's America is still anyone's guess.

Among regional mandates, Asia ex-Japan hedge fund managers topped the table for the month, gaining 1.28% followed by European and Latin American managers with gains of 1.10% and 0.99% respectively. The first round of the French presidential elections saw Macron and Le Pen heading towards the second round of the elections and this provided some relief for European equity markets. Optimism on a centrist Macron victory buoyed equity markets across the board and coupled with encouraging macro data from Europe, the potential for further disintegration of the EU bloc coming from Frexit became less alarming.

Latin American equities were modest in April, with the Mexican IPC Index gaining 1.48% while the Brazilian Ibovespa Index was up 0.48% over the same period. The renegotiations of the NAFTA deal by the Trump administration proved to be a relief for the three countries in the agreement, which would otherwise have seen the NAFTA being abolished. However, much remains to be seen as the extent of renegotiations remains a big question mark. North American and Japan managers were also in positive territory this month, gaining 0.98% and 0.40% in April.

On a year-to-date basis, Latin American managers outshone regional peers, and were up 7.41% followed by Asia ex-Japan peers who posted gains of 7.12% over the same period. European, North American and Japanese managers are also in positive territory as of April 2017 year-to-date, up 3.41%, 2.94% and 2.04% respectively.

Press release

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The full report can be found on Eurekahedge's website:

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