January data from Eurekahedge reveals that hedge funds started the year up 0.87 per cent in January with managers reporting performance-based gains of USD1.3 billion.
Investor subscriptions stood at USD1.2 billion during the start of the year. In annual year 2016, final asset flow figures show that manager saw redemptions totalling USD55.1 billion while performance-based gains stood at USD35.1 billion over the same period.
For annual year 2016, AUM for European mandated hedge funds declined 5.47 per cent with strong redemptions of USD27.0 billion recorded – the steepest outflows for 2016 among regional mandates.
The USD251.1 billion CTA/managed futures mandated hedge fund industry saw the highest net investor inflows among strategic mandates for annual year 2016 (USD11.0 billion). Managers posted modest performance-driven gains totalling USD2.7 billion over the same period.
The USD774.0 billion long/short equities hedge fund industry recorded the steepest decline in net outflows among strategic mandates or USD29.1 billion in annual year 2016 while performance-based gains stood at USD8.7 billion over the same period.
Asian managers saw asset decline of USD1.8 billion for annual year 2016, with total net outflows of USD3.4 billion recorded, while performance-based gains stood at USD1.6 billion. The Asian hedge fund industry oversees 8 per cent of total global assets, or USD169.6 billion in AUM as of 2016.
Long-only absolute return funds gained 7.61 per cent in 2016, well ahead of underlying markets and hedge fund peers which were up 7.33 per cent and 4.46 per cent respectively. Asia is home to 43 per cent of assets in the USD225.9 billion long-only absolute return funds industry is concentrated within the region alone.
Hedge funds started the year on a positive note, up 0.87 per cent during the month of January. Meanwhile, underlying markets as represented by the MSCI AC World Index (Local) gained 1.49 per cent over the same period. Among regional mandates, Latin American hedge fund managers topped the tables, gaining 3.73 per cent while event driven managers posted the best returns, up 2.02 per cent among strategic mandates. Financial markets were still hinged on the developments post-Trump inauguration with US equity markets trading higher at the start of January on the back of encouraging US macro data. The flow of economic data from major economies outside of the US has also signalled an encouraging outlook on the global economy.
Eurekahedge writes: “However, this still has to be taken with a pinch of salt as we are yet to see the full impact of Trump’s protectionist policies on America’s trade partners. While there are understandable jitters on an America First rhetoric, Trump could be treading political sensitivities too precariously.”
