Hedge Fund May Decent
After nearly a year of encountering a “winning run,” hedge funds plummeted 1.2 percent in May. According to Eurekahedge Pte this is due to the escalation of market volatility from Europe’s sovereign debt debacle. The last time the Eurakahedge Hedge Fund Index – which tracks over 2,800 funds around the world – dropped was in June 2010. This year it has enjoyed an increase of 1.5 percent until June.
The hardest hit were the managed futures funds and CTAs. They had done well in April but May was bad news for them. There was a 2.5 percent drop in the MSCI World (MXWO) for the same reason. According to COO at Rogers Investment Advisors K.K., Rory Kennedy “the macro picture combined with thin trading volume in Asia makes for a very difficult picture for a hedge-fund manager to read. Managers need to be able to move rapidly and not try to fight the market.”
Asia, Latin America and Hedge Funds
In addition, Kennedy said that due to a combination of thin trading volume in Asia and the macro picture, hedge fund managers have a hard time predicting the outcome. This results in managers needing to move faster and “not try to fight the market.” Assets under management have dropped by a staggering $5bn, reducing the size of the industry to $1.82tr.
Latin American funds have something to smile about though, returning 0.4 percent, putting them up there in best performance delivery. Asia ex-Japan funds on the other hand, probably had a downward turn on their lips, losing 1.9 percent, ranking it the worst performer.