Hedge funds were up 1.36 percent in August with performance-based gains of approximately $5.5 billion, according to data provider Eurekahedge.
The Eurekahedge Hedge Fund Index trailed equities, however, as the MSCI World Index gained 2.48 percent during the month.
On a year-to-date basis, hedge funds are up 4.22%, falling slightly behind underlying markets as the MSCI World Index returned 5.96% over the same period.
Modest GDP figures from the US and supportive interest rate policies from central banks, such as quantitative easing by the European Central Bank, resulted in more positive investor attitudes which pushed equity markets higher and drove volatility down during the month, Eurekahedge said.
Macro-economic statistics indicating an economic slowdown in China led to mixed results in the Asian markets with more economic stimulus measures expected from the Chinese government.
In August, hedge funds focused on North America were up 1.54 percent amid gains in underlying markets as the MSCI North America Index increased 3.81 percent during the month.
Managers investing with an emerging market and Asia, excluding Japan, also saw strong gains of 1.50 percent and 1.46 percent, respectively, with Asian funds attributing much of their gains to their exposure to Thai and Indian equities which underwent strong rallies due to an improving outlook for the regional economies.
Latin and North American mandates saw strong gains in August, with Latin America focused hedge funds delivering the largest gain of 2.27 percent as underlying equity markets in Brazil saw a sharp rally in anticipation of the coming elections. The Brazil IBOVESPA grew 9.78 percent in August and is up almost 19 percent this year.
Hedge funds, Eurekahedge