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Asian Managers Lead as Hedge Funds Post 9th Consecutive Month of Gains
Hedge funds were up 0.40%1 during the month of September, while underlying markets, as represented by the MSCI AC World Index (Local), gained 2.17% over the same period. Most regional mandates ended the month in the green, with Japan dedicated hedge funds in the lead as tensions on the Korean peninsula receded and the Japanese yen depreciated relative to major currency pairs. Across strategies, equity long bias hedge funds posted yet another month of gains and were up 12.55% for the year.
September started off on a nervous note as tensions escalated on the Korean peninsula with a hydrogen bomb testing. The main shock led to selling pressure in equity markets as markets contemplated the gravity of the tensions, however, in the absence of subsequent provocations and an almost comedic name calling between President Trump and Kim Jong-un, markets were distracted away towards hawkish rhetoric coming from key central banks. The possibility of a faster than expected rate normalization put pressure on yields with the US dollar reversing its trajectory to climb higher against major currency pairs (barring the GBP). The talk of higher rates however did little to arrest the gains for equity markets which continue to trend higher hinged on the hopes of fiscal spending in developed markets, particularly the US.
Below are the key highlights for the month of September 2017:
- Hedge funds gained 0.40% in September with underlying markets, as represented by the MSCI AC World Index (Local), up 2.17% over the same period. On a year-to-date basis, managers gained 5.50% while underlying markets were up 11.97%.
- Among developed mandates, Japanese hedge funds posted a return of 2.01%, followed by North American and European counterparts which were up 0.89% and 0.85% for the month respectively. On a year-to-date basis, Japanese managers were up 9.13% followed by European and North American managers who posted gains of 5.89% and 4.23% respectively.
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