Hedge Funds Are Up 2.45% For The Year; Gaining US$71.2Bn In Assets

Written by Eurekahedge

Key highlights for November 2015:

Hedge funds are up 2.45% for the year, with the total AUM growing by US$110.7 billion in 2015. US$71.2 billion of the gain in assets are attributed to investor inflows and US$39.6 billion to performance-driven gains. This compares with an AUM growth of US$121 billion in 2014 where investor allocations stood at US$34.8 billion while performance-driven gains came in at US$86.2 billion.

Almost 58% of hedge fund managers have posted positive returns in 2015, their lowest on record since 2011. Around 20% of the managers have posted gains in excess of 8% this year while around 15% of the managers have reported losses exceeding 8%.

Asia-ex-Japan investing funds have delivered the best returns globally and are up 7.07% for the year. Assets managed by Asia-ex-Japan grew by US$9.6 billion as of 2015 year-to-date with US$4.7 billion attributed to investor inflows and US$4.9 billion attributed to performance-driven gains. Within the region, Greater China mandated hedge funds are up 9.45%, outperforming the CSI 300 Index by 8.52%.

North American hedge funds have seen their assets grow by US$60.6 billion since the start of the year, with about 60% of the gain in assets attributed to investor inflows. However, performance has been lukewarm with North American mandated funds up 0.72% year-to-date – on track to post their worst returns since 2008.

On a year-to-date basis, CTA/managed futures hedge funds have grown their asset base by 18%, recording their highest level of investor inflows on record since 2006 with net investor allocations worth US$27.8 billion. Total AUM for CTA/managed futures funds stand at US$241.1 billion, the highest level on record.

Average performance and management fees charged by new launches in Europe this year stand at historic lows, with average performance fees declining to 13.91% while average management fees are down to 1.16%. For details refer to the this month’s 2015 Overview: Key Trends in European Hedge Funds report.

Hedge funds gained for the second consecutive month up 0.77% 1 in November outperforming underlying markets as represented by the MSCI AC World Index All Core 2, which gained 0.38% during the month. November was dominated by the theme of a US rate hike later in the year, along with the European Central Bank’s (ECB) dovish stance regarding further easing in the Eurozone. The latter has been to some extent realized earlier during the month when the ECB decided to cut deposit rates even further, adding to their menu an ever expansive array of negative yielding bonds on offer from countries otherwise plagued with anemic growth. It would be interesting to see how this easy credit and the simultaneous calls for reforms aka austerity will lead the Eurozone onto firmer grounds. Meanwhile markets struggled with soft PMI data from China which led commodity markets further into the red. Oil prices remained under pressure during the month despite rising inventories, and it is unlikely that OPEC may be reducing production in the near term – especially with Saudi Arabia and Russia/Iran embroiled in a proxy war in Syria where the latter are likely to gain more from any price increase.