Hedge funds globally were up 0.24 percent during the month of November, with 2017 year-to-date returns coming in at 7.19 percent. What’s more, they are on track to post 12 consecutive months of gains in an annual year for the first time on record since 1999, according to the Eurekahedge Hedge Fund Index.
The report stressed that barring any major event materialising this should see the global hedge fund industry ending 2017 with gains of 7.81 percent - 322 basis points higher in comparison to annual gains for 2016.
It also noted that the total hedge fund industry AUM has grown by almost 7 percent in 2017 following a contraction in 2016 on the back of strong performance-based gains and a renewed interest from investors. Industry assets have grown by $160 billion in 2017 in contrast to a $20 billion decline last year.
Fund closures continued to outpace launch activity for the second consecutive year with 490 funds liquidating in 2017 whilst the number of startups for the year stands at 451. While Asia and North America have seen a net growth in fund population, Europe has seen a decline for the third year running.
Underlying markets as represented by the MSCI AC World Index (Local), gained 1.16 percent in November with its 2017 year-to-date returns coming in at 16.17 percent. Roughly 76 percent of underlying constituent funds for the Eurekahedge Hedge Fund Index were in positive territory in November, with majority of them being long/short equities mandated.
Equity markets continued to perform well this month with strength led by US and emerging Asian markets, the report noted. Encouraging macroeconomic data from US and Japan buoyed economic recovery sentiments with growth in manufacturing activity adding to much optimism.
On the other hand, data coming out of the Europe was rather lukewarm subdued inflation figures, the failure in German coalition talks and a strengthening euro. Meanwhile early estimates put hedge fund returns in positive territory at 0.36 percent for the month of December.
Returns were mixed across the board of regional mandates with Asia ex-Japan hedge fund managers delivering the best returns, up 1.46 percent over the month, followed by Japan and North American mandated hedge funds with gains of 0.92 percent and 0.76 percent respectively.
On the other hand, Latin American mandated hedge funds posted the steepest decline in November, down 1.38 percent followed by European mandated hedge funds with losses of 0.44 percent. On a year-to-date basis, Asia ex-Japan hedge fund managers led the table gained 19.84 percent followed by their emerging markets and Japanese counterparts with returns of 15.16 percent and 12.09 percent respectively.
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