Sun, Jan 20, 2019
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Mixed returns for hedge funds in November as US, Asia recover but European managers sink over Italy and Brexit

Tuesday, December 11, 2018
Opalesque Industry Update - The Eurekahedge Hedge Fund Index was down 0.17% in November, trailing the global equity market as represented by the MSCI AC World Index (Local) which edged 1.11% higher.

Dovish stance from the US Federal Reserve and anticipation over the G20 meeting in Buenos Aires helped the North American and Asian equity markets recover from severe losses they suffered last month.

On the other hand, uncertainties continued to loom over the European economies as Brexit negotiation remained inconclusive, and Italy's budget plan raised concerns over the country's debt levels.

Despite the robust gains recorded by major equity indices across North America and Asia Pacific, the Eurekahedge Long Short Equities Hedge Fund Index was down 0.49% throughout the month, as fund managers struggled to position themselves to benefit from the equity market reversal over the latter half of the month.

On a year-to-date basis, the Eurekahedge Hedge Fund Index was down 2.40% over the first eleven months of 2018, and is on track to post its worst performance since the global financial crisis in 2008.

Roughly 44.8% of the underlying constituents of the Eurekahedge Hedge Fund Index avoided posting losses over the month, and barely 9.2% of the hedge fund managers were able to maintain double-digit year-to-date returns.

The asset-weighted Mizuho-Eurekahedge Index (USD) declined 0.73% during the month, in contrast to the 0.17% loss posted by the equal-weighted Eurekahedge Hedge Fund Index, indicating that the losses were heavier among the large-sized hedge fund managers.

Indeed, the equal-weighted Eurekahedge Small Hedge Fund Index which comprises fund managers overseeing no more than US$100 million in assets was marginally up by 0.09%, in contrast to the 0.98% losses posted by billion dollar hedge funds over the month.

Key highlights for the month of November 2018:

Hedge funds were down 0.17% in November, trailing behind the MSCI AC World Index (Local) which gained 1.11% over the month. Roughly 23.2% of the hedge fund managers tracked by Eurekahedge outperformed the market index in November.

On an asset-weighted basis, hedge funds lost 0.73% in November, bringing their year-to-date losses to 3.79%, as captured by the Mizuho-Eurekahedge Hedge Fund Index (USD).

North American hedge funds gained 0.89% in November, on the back of the underlying equity market rally in response to Powell's remark that the Fed rates are 'just below' the neutral level.

Over in Asia, optimism over a slower pace of rate hikes in the US boosted the region's equity markets and currencies. The Eurekahedge Asia ex Japan Hedge Fund Index was up 1.77%, with a sizeable portion of the gains concentrated among fund managers focusing on India (5.80%) and Greater China (2.67%).

The Eurekahedge European Hedge Fund Index slumped 1.03% in November, with the underlying long/short equities mandate down 1.46% as the region's equity markets remained vulnerable to uncertainties surrounding Brexit negotiation and Italy's debt levels.

Performance across strategic mandates was a mixed bag in November, with arbitrage hedge funds leading the pack by gaining 4.86% over the month. On the other end of the spectrum, distressed debt hedge funds were down 1.66%, dragged by the weakness in high yield market.

The Eurekahedge CTA/Managed Futures Hedge Fund Index was down 0.23% during the month as plummeting oil and overall weakness in the energy sector weighed on fund managers' performance. On a year-to-date basis, the index was down 4.21% and the mandate has suffered US$12.2 billion of performance-based losses and US$18.5 billion of net investor redemptions.

Fund managers utilising AI/machine learning strategies were up 2.09% in November, ending their streak of losses which placed them on track to record their worst year since the inception of the Eurekahedge AI Hedge Fund Index. On a year-to-date basis, the index is still down 4.50%.

The Eurekahedge ILS Advisers Index was down 4.24% as the catastrophic losses incurred by Hurricane Florence and Hurricane Michael weighed on ILS fund managers' returns. On a year-to-date basis, ILS fund managers were down 3.55%, firmly placing 2018 as the second worst year for the Eurekahedge ILS Advisers Index right next to 2017.

The Eurekahedge Crypto-Currency Hedge Fund Index was down 10.88% in November, as Bitcoin price crashed below the US$4,000 level nearing the end of the month. The index has lost 61.47% of its value since the end of 2017.

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Gundlach's Forecast for 2019[more]

    Jeffrey Gundlach said that 2019 will mark the start of a period when bond markets must recon with the rising federal deficit. In his most passionate comments ever on this topic, he said the exploding national debt and liabilities involving pension funds, state and local government governments and So

  2. Institutional Investors: Texas Teachers allocates $1.9bn to 12 strategies, $53.6bn LGPS asset pool readies double global equity launch, The rise of co-investment SPVs for institutional investors, Wisconsin commits $500m to alternatives[more]

    Texas Teachers allocates $1.9bn to 12 strategies From PIonline.com: Texas Teachers Retirement System, Austin, committed a total of $1.871 billion to 12 private market investment strategies managed by existing managers, a transaction report showed. The biggest move by investment officers o

  3. News Briefs: The Jeff Bezos divorce: $136bn and Amazon in the middle, Bridgewater Associates partners with consulting firm, Cyprus no longer Mediterranean haven for Russian businesses, Goldman Sachs on course to launch cash management in mid-2020[more]

    The Jeff Bezos divorce: $136bn and Amazon in the middle From Mint: The announcement by Amazon founder Jeff Bezos, the world's wealthiest man, and his wife that they will divorce has captivated the imagination -- how will they split his giant fortune, estimated at $136 billion? And what wi

  4. Institutional Investors: Institutional investors plot large property allocations, Qatar Investment Authority aims to reach $45bn in U.S. investments, Louisiana Teachers assigns $200m, SoftBank move to slash WeWork investment sends shockwaves[more]

    Institutional investors plot large property allocations From FT: Institutional investors plan to make large allocations to property in 2019, taking them closer to their desired targets. At least €72.4bn of new capital is expected to flow into real estate this year, according to a

  5. Legal: Attorney sues after Tampa hedge fund goes under, Hedge funds showing increased interest in litigation claims, Argentina sued again by hedge fund on bonds tied to GDP growth[more]

    Attorney sues after Tampa hedge fund goes under A Tampa hedge fund company may be in legal trouble after the firm that was holding its money was sued by a lawyer who claimed "gross negligence" caused the fund to lose tens of millions of dollars. James Cordier, the head of optionseller