8 Dec 2010
The Eurekahedge Hedge Fund Index was up 0.55%1 in November 2010, with hedge funds recording flat to positive returns for the month across the board. Hedge funds outperformed the underlying markets by 2.90% as the MSCI Word Index2 dropped 2.35%.
Below are the key highlights for November:
Regional Indices
Managers investing in Japan posted excellent returns and healthy fund inflows amid a strong market rally. The Eurekahedge Japan Hedge Fund Index, boosted by the index majority of Japanese long/short equity hedge funds that maintained a net long bias position throughout November, rose 2.42% in the month. Japanese managers have been particularly adept at navigating through the volatile equity markets this year – the Eurekahedge Japanese Long/Short Equity Index is up 2.48% YTD November while the Topix is down 5.14% over the same period. North American investing hedge funds also delivered noteworthy gains for the month through their exposure to small-cap US stocks and the US dollar. Standing as one of the top two best performing North American strategic mandates for November, long/short equity managers raked in gains to the tune of 1.89% while the S&P 500 Index finished the month lower by 0.23%.
Most other Eurekahedge regional mandates ended the month in positive territory, beating their respective underlying markets (as tracked by MSCI indices). Despite mounting concerns over the fiscal health of some EU members and their impact on the euro, the Eurekahedge European Hedge Fund Index witnessed a gain of 0.37% as portfolio managers used hedging techniques to protect early month gains. A higher Russian equity index return for November also helped Eastern European hedge funds generate an average profit of 1.72% as they maintained net long exposures.
Strategy Indices
Most strategic mandates delivered positive returns for November, with event driven hedge funds standing out as the best performers. Increased corporate activity in 2010 has helped event driven managers to register excellent returns throughout the year, with the Eurekahedge Event Driven Hedge Fund Index up 12.24% YTD November. Long/short equity and multi-strategy funds were also up for the month, with their NAV’s rising 1.25% and 1.27%, respectively, as managers successfully exploited the volatile market conditions and locked in gains from both the long and short side. Distressed debt funds also continued their upward movement – the Eurekahedge Distressed Debt Hedge Fund Index’s November return of 1.02% led the Merrill Lynch High Yield Index by 2.14%, even against the backdrop of a higher month-on-month default rate. The YTD November return of distressed debt funds stands at a hefty 19.53%.
Below are the key highlights for November:
- Early reporting funds indicate that US$5 billion went into the industry in November.
- Japanese hedge funds have outperformed the Topix by almost 9% YTD November.
- Distressed debt hedge funds were the top performing strategic mandate for the past two years, having gained almost 60% over this period.
- Asia ex-Japan funds have witnessed six months of back-to-back positive returns, up 12.50%.
Regional Indices
Managers investing in Japan posted excellent returns and healthy fund inflows amid a strong market rally. The Eurekahedge Japan Hedge Fund Index, boosted by the index majority of Japanese long/short equity hedge funds that maintained a net long bias position throughout November, rose 2.42% in the month. Japanese managers have been particularly adept at navigating through the volatile equity markets this year – the Eurekahedge Japanese Long/Short Equity Index is up 2.48% YTD November while the Topix is down 5.14% over the same period. North American investing hedge funds also delivered noteworthy gains for the month through their exposure to small-cap US stocks and the US dollar. Standing as one of the top two best performing North American strategic mandates for November, long/short equity managers raked in gains to the tune of 1.89% while the S&P 500 Index finished the month lower by 0.23%.
Most other Eurekahedge regional mandates ended the month in positive territory, beating their respective underlying markets (as tracked by MSCI indices). Despite mounting concerns over the fiscal health of some EU members and their impact on the euro, the Eurekahedge European Hedge Fund Index witnessed a gain of 0.37% as portfolio managers used hedging techniques to protect early month gains. A higher Russian equity index return for November also helped Eastern European hedge funds generate an average profit of 1.72% as they maintained net long exposures.
Strategy Indices
Most strategic mandates delivered positive returns for November, with event driven hedge funds standing out as the best performers. Increased corporate activity in 2010 has helped event driven managers to register excellent returns throughout the year, with the Eurekahedge Event Driven Hedge Fund Index up 12.24% YTD November. Long/short equity and multi-strategy funds were also up for the month, with their NAV’s rising 1.25% and 1.27%, respectively, as managers successfully exploited the volatile market conditions and locked in gains from both the long and short side. Distressed debt funds also continued their upward movement – the Eurekahedge Distressed Debt Hedge Fund Index’s November return of 1.02% led the Merrill Lynch High Yield Index by 2.14%, even against the backdrop of a higher month-on-month default rate. The YTD November return of distressed debt funds stands at a hefty 19.53%.
