Opalesque Industry Update – Total assets under management (AUM) for global hedge funds at the end of 2021 stood at $2,449.1 billion, driven by both performance-based growth and asset allocations investors of $125.0 billion and $75.6 billion respectively.
European and North American hedge funds saw the largest year-over-year increase in assets under management among their regional counterparts. European hedge funds’ total assets under management increased by US$44.5 billion to US$507.9 billion, while North American hedge funds’ total assets under management increased by US$139.5 billion. billion US dollars to reach 1663.5 billion US dollars in 2021.
Meanwhile, hedge fund managers started the year in the red with losses of -1.23%, outperforming the underlying equity market represented by the MSCI ACWI (Local) which returned -4 .91% over the month. In terms of 2021 performance, global hedge funds returned 9.35%, recording their second best performance since 2010.
On an asset-weighted basis, hedge funds were down -0.75% in January, as measured by the Eurekahedge Asset Weighted – USD Index. The ability of large hedge funds to allocate their assets under management flexibly to manage volatility helped them outperform their smaller counterparts during the month. Billion-dollar hedge funds, as represented by the Eurekahedge Billion Dollar Hedge Fund Index, were down -0.14%, while medium hedge funds, as represented by the Eurekahedge Medium Hedge Fund Index, recorded gains. relatively larger losses of -0.96%.
The Eurekahedge North American Hedge Fund Index fell -2.02% in January, outperforming the three major US indices with the NASDAQ, S&P 500 and DJIA posting -8.98%, -5.26% and – respectively. 3.32% loss over the month. In terms of 2021 performance, North American hedge funds gained 14.02%, recording their second straight year of double-digit performance.
Pan-Asian hedge funds also suffered losses in January, with the Eurekahedge Asia ex-Japan Hedge Fund Index and the Eurekahedge Japan Hedge Fund Index posting -3.39% and -2.46% losses respectively. In terms of 2021 performance, the two Asian mandates posted 6.79% and 8.60% return, respectively, as slowing growth in China in addition to the Federal Reserve’s hawkish stance contributed to stock market weakness. wider in the region.
Eurekahedge CTA/Managed Futures Hedge Fund Index up 0.87% in January
The Eurekahedge CTA/Managed Futures Hedge Fund Index gained 0.87% in January, outperforming its strategic peers during the month. In terms of asset flows, CTA/Managed Futures funds saw an increase in assets under management of US$26.5 billion in 2021, of which US$19.3 billion came from net flows. Investors are increasingly optimistic about investing in CTA/managed futures funds driven by rising energy prices.
The CBOE Eurekahedge Long Volatility Hedge Fund Index rose 2.04% in January, supported by rising market volatility, with the CBOE VIX hitting 24.83 at the end of January. Among their Volatility Index peers, only long volatility hedge funds generated a positive return, with their short volatility, relative value and extreme risk peers declining -0.03%, -0.91% and -0.91% respectively. -1.76%.
Cryptocurrency-focused fund managers fell -19.31% in January – recording their biggest losses since November 2018, as shown by the Eurekahedge Crypto-Currency Hedge Fund Index. Bitcoin prices fell to $37,000 from their all-time high of $68,000 recorded in November 2021. In January, the leading cryptocurrency Bitcoin fell -19.52%, while the second leading crypto- currency represented by Ethereum was down -29.81%.