Key Takeaways
- • The Eurekahedge Hedge Fund Index outperformed the MSCI AC World Index by 6.11 per cent in February 2020, its strongest outperformance relative to underlying markets since February 2009.
- • Long volatility and tail risk hedge funds led performance tables in February as market volatility stayed elevated.
- • The global hedge fund industry recorded investor redemptions totalling USD127.5 billion in 2019, a level not seen since the global financial crisis, while net outflows of USD1.7 billion and a performance-based decline of USD30.4 billion were recorded year-to-date through February 2020.
- • The Eurekahedge North American Long Short Equities Index fell 3.71 per cent in February but remained 4.18 per cent ahead of the S&P 500 year-to-date.
- • The Eurekahedge Greater China Long Short Equities Index rose 1.70 per cent in February, supported by improving COVID-19 conditions in Mainland China and PBOC accommodation.
Summary
The Eurekahedge Hedge Fund Index outperformed the MSCI AC World Index by 6.11 per cent in February 2020, according to Hedgeweek's report on Eurekahedge data. The result marks the index's strongest outperformance relative to underlying markets since February 2009. Long volatility and tail risk strategies led the performance tables as market volatility remained elevated throughout the month.
Industry flows remained weak. The global hedge fund industry AUM increased by USD10.3 billion in 2019, but investor redemptions totalling USD127.5 billion were recorded over the year, a level the industry has not seen since the global financial crisis. Going into 2020, net investor outflows of USD1.7 billion and a performance-based decline of USD30.4 billion were recorded as of February year-to-date.
Regional and strategy-level results were mixed. The Eurekahedge North American Hedge Fund Long Short Equities Index declined 3.71 per cent in February, weighed by US equity sell-offs late in the month, though its constituents remained 4.18 per cent ahead of the S&P 500 Index year-to-date. The Eurekahedge Greater China Long Short Equities Hedge Fund Index gained 1.70 per cent in February, outperforming the Hang Seng Index by 2.39 per cent and the CSI 300 Index by 3.29 per cent. Optimism over improving COVID-19 conditions in Mainland China and accommodative PBOC policies supported the region's equity market. The USD30.3 billion Greater China mandate was up 1.03 per cent year-to-date.
The Eurekahedge Fixed Income Hedge Fund Index fell 0.77 per cent in February despite risk-off sentiment that boosted global government bonds. The Federal Reserve and the ECB signalled potential policy support to counter the economic slowdown caused by the COVID-19 outbreak, pushing bond yields lower during the month.
Industry flows remained weak. The global hedge fund industry AUM increased by USD10.3 billion in 2019, but investor redemptions totalling USD127.5 billion were recorded over the year, a level the industry has not seen since the global financial crisis. Going into 2020, net investor outflows of USD1.7 billion and a performance-based decline of USD30.4 billion were recorded as of February year-to-date.
Regional and strategy-level results were mixed. The Eurekahedge North American Hedge Fund Long Short Equities Index declined 3.71 per cent in February, weighed by US equity sell-offs late in the month, though its constituents remained 4.18 per cent ahead of the S&P 500 Index year-to-date. The Eurekahedge Greater China Long Short Equities Hedge Fund Index gained 1.70 per cent in February, outperforming the Hang Seng Index by 2.39 per cent and the CSI 300 Index by 3.29 per cent. Optimism over improving COVID-19 conditions in Mainland China and accommodative PBOC policies supported the region's equity market. The USD30.3 billion Greater China mandate was up 1.03 per cent year-to-date.
The Eurekahedge Fixed Income Hedge Fund Index fell 0.77 per cent in February despite risk-off sentiment that boosted global government bonds. The Federal Reserve and the ECB signalled potential policy support to counter the economic slowdown caused by the COVID-19 outbreak, pushing bond yields lower during the month.
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