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The MSCI AC World Index (Local) gained 7.36% over the month, recovering most of the losses it suffered in December last year. Returns were positive across geographic mandates, as most of the fund managers generated gains on the back of the equity market rallies around the globe.

North American fund managers gained 3.65% during the month, while their peers focusing on Asia ex-Japan generated 3.11% returns.

The weaker US dollar and cautious tone of the Fed created tailwinds for the emerging markets throughout the month, resulting in one of the best monthly showing of the Eurekahedge Emerging Markets Hedge Fund Index in recent years, as it edged 5.46% higher in January.

Roughly 72.5% of underlying constituents of the Eurekahedge Hedge Fund Index posted positive returns in January, in contrast to how only 35.5% of these fund managers avoided losing money in December last year.

Fund managers utilising equity long-biased strategies topped the table with their 5.49% gain in January, while on the other end of the spectrum long volatility strategic mandate ended the month down 5.08% as market volatilities remained suppressed throughout the month.

Key highlights for the month of January 2019:

Hedge fund managers returned 2.22% in January, supported by the global equity market rally which saw the MSCI AC World Index (Local) gaining 7.36% over the month. Over the last 12 months hedge funds have outperformed the MSCI AC World Index (Local) by 3.23%.

On an asset-weighted basis, hedge funds were up 0.70% in January, as captured by the Mizuho Eurekahedge Hedge Fund Index (USD). The index slumped 4.23% throughout 2018.

North American long short equity hedge fund managers gained 5.28% in January, kicking off the year with their strongest monthly performance over the past decade, as the region's equity markets reacted positively to the dovish tone of the Fed and hopes that the US-China trade relations could improve.

The Eurekahedge European Hedge Fund Index gained 2.22% in January, supported by improving global trade outlook and expectations that the UK government would avoid a disorderly Brexit.

The Eurekahedge CTA/Managed Futures Hedge Fund Index declined 0.37% during the month as fund managers struggled to capture the trend reversal in energy and commodity sectors.

Fund managers utilising AI/machine learning strategies returned 2.76% in January, after recording their first year of losses. The Eurekahedge AI Hedge Fund Index was down 5.18% throughout 2018.

Returns across the CBOE Eurekahedge Volatility Indexes were mixed in January, with long volatility mandate down 5.08% and short volatility mandate up 4.52% as market volatilities dwindled throughout the month. The CBOE VIX Index plummeted 34.35% in January as the risk-off sentiment among investors eased off.

The Eurekahedge ILS Advisers Index was up 0.44% in January, ending its streak of losses through the final quarter of 2018 which resulted from the catastrophic losses incurred by the 2018 Atlantic hurricane season. ILS fund managers posted losses of 5.60% and 3.57% in 2017 and 2018 respectively.

The Eurekahedge Crypto-Currency Hedge Fund Index declined 9.08% in January, narrowly outperforming Bitcoin which slumped 10.98% over the month. Crypto-currency hedge fund managers lost 71.63% throughout 2018, posting their worst year on record.

Regional Indices

North American fund managers gained 3.65% throughout the month, recovering from the losses they suffered last year. The dovish tone of the Fed and optimism over the upcoming trade talks between the US and China helped the region's equity markets recover from the sell-off in December.

The Eurekahedge Japan Hedge Fund Index gained 2.23% during the month, supported by the risk-on sentiment among investors.

Asia ex-Japan and emerging market equities rebounded in January, as optimism over the US-China trade talk outweighed concerns over China's slowing growth. The two mandates were up 3.11% and 5.46% respectively during the month.

Strategy Indices

Returns were mostly positive across strategic mandates in January. The equity long-biased mandate ended at the top of the table with a 5.49% return over the month as fund managers utilising this strategy reaped the largest benefit from the equity market rallies around the globe.

In a similar vein, short volatility and long/short equities strategies also benefited from the upward movement in the equity markets, which kept market volatilities suppressed throughout the month. The two mandates ended the month up 4.52% and 3.59% respectively.

CTA/managed futures mandate declined 0.37% in January, despite strong recovery in energy and industrial metal sectors throughout the month.