Trade War, Rate Hikes, Slowing Growth – Hedge Funds Recorded Best Outperformance Over Equities Since 2011Guest Post
The Mizuho-Eurekahedge Index (USD), an asset-weighted index representing the global hedge fund industry performance was down 0.39% in December, bringing its year-to-date loss to 4.09% amidst the global equity market sell-off. Despite ending the year in the red, hedge fund managers recorded their best outperformance over the global equity markets since 2011, as they returned 7.70% more than the MSCI ACWI IMI (USD) throughout 2018.
Yearly Outperformance of Hedge Fund Managers Against Equity Markets
Historically, the Mizuho-Eurekahedge Index (USD) has outperformed underlying equity markets during periods of market distress, such as the years 2008 and 2011, during which the index outperformed global equity markets by 28.52% and 7.80% respectively.
Hedge Fund Performance by Region (2018 YTD)
Hedge Fund Performance by Strategy (2018 YTD)
Hedge Fund 2018 Monthly Returns Distribution
Proportion of Fund Launches with ≥20% Performance Fees
Hedge Fund Launches and Closures
A total of 601 fund launches and 613 liquidations were recorded in 2018, marking a third consecutive year in which fund closure activities outpace launches. Among these newly launched funds, 55.7% charged no less than 20% performance fees, compared to 45.8% back in 2017. However, both figures are still significantly lower than what was observed prior to the financial crisis, during which an overwhelming majority of hedge funds charged 20% performance fees or higher.
Article by Eurekahedge