The October 2016 Eurekahedge Report finds that over September 2016 hedge funds recorded their fifth month of investor redemptions pushing net investor allocations into the red for the year with USD8.7 billion outflows.
As of September 2016 year-to-date, this has been the steepest year-to-date redemptions since 2009. Nonetheless, investors have been selective in their allocations across strategies with CTA/managed futures and multi-strategy hedge funds seeing stronger subscriptions.
The USD207.5 billion event driven hedge fund space has seen USD14.0 billion investor redemptions over the past nine months, the strategy’s steepest YTD outflows on record and up from USD1.5 billion outflows over the same period last year.
The asset base for the USD1.49 trillion North American hedge fund industry grew by USD13.1 billion over the year with most of this growth attributed to performance-driven gains (USD18.5 billion year-to-date) while redemptions totalling USD5.5 billion were recorded over the same period.
The USD254.6 billion CTA/managed futures hedge fund industry has seen its asset base grow by USD17.1 billion over the past nine months, with the strategy recording the highest year-to-date investor inflows (USD11.0 billion).
The USD529.6 billion European hedge fund industry has seen its asset base contract by USD5.5 billion year-to-date, with managers seeing strong investor redemptions totalling USD17.1 billion over the past five consecutive months for the period ending September. The Eurekahedge European Hedge Fund Index was down 0.39 per cent year-to-date.
Within Asia Pacific, Japan dedicated strategies have been the worst performing, losing 3.00 per cent while broad Asia ex-Japan mandates are up a modest 2.39 per cent with strength led by underlying India focused hedge funds (+8.47 per cent for the year). Indian hedge funds have outperformed the BSE Sensex Index which gained 6.69 per cent over the past nine months.
While underlying Greater China dedicated hedge funds fell 0.97 per cent over the year, managers still beat underlying markets with the CSI 300 Index down 12.80 per cent over the same period.
The top performing North American hedge funds have returned 18 per cent on average for the year, well ahead of the star performers in Asia and Europe which have gained around 8 per cent each. Of the top 150 funds, 71 per cent of North American managers posted double digit returns as of August 2016 year-to-date compared with 51 per cent of managers over the same period in 2015.
