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US Hedge Fund Fees Moving Up
Hedge Funds, Financial Services
Strategy Highlight CTA/Managed Futures (-2.12% YTD) -US$31.57 billion AUM YTD
CTA/managed futures fund managers continued to struggle under the pressure of the weakening energy and metals sector. The Eurekahedge CTA/Managed Futures Hedge Fund Index is down 2.12% year-to-date. Oil supply disruption and the trade friction between the US and China remained as the major themes in July.
Region Highlight Asia (-1.68% YTD) +US$2.88 billion AUM YTD
Asian hedge funds were down 1.68% as of July 2018 year-to-date, as they struggle under the pressure of global trade and political concerns. Fund managers focusing in China, Korea, and India posted losses of 2.37%, 3.54%, and 3.90% respectively over the first seven months of the year.
Management Fees by Launch Year
North American hedge funds which launched in 2018 charge 1.46% management fees on average, marginally higher than the global industry average of 1.40%. The last two years saw the average management fees moving higher, following five consecutive years of decline.
North American hedge fund managers utilising long short equities strategy have successfully traded their way through the first seven months of 2018 to remain in the positive territory, returning 3.91% despite the volatile market situation. On the other hand, their peers focusing on Greater China mandate struggled under the escalation of the global trade friction. The Eurekahedge Greater China Long Short Equities Hedge Fund Index is down 2.58% year-to-date.
However, the losses posted by Greater China equities fund managers during the recent months were insignificant compared to the 31.88% gain they registered last year. In comparison, North American fund managers utilising long short equities strategy gained 9.53% in 2017.
Hedge Fund Launches and Closures
Preliminary estimates showed that hedge fund launches over the first three quarters of 2018 outpaced closures despite the difficult trading situation and volatile equity markets over the past few months. This marked a reversal from the trend of closures exceeding launches which has persisted since 2016.
Article by EurekaHedge
This article was originally published in ValueWalk.
Photo: Lucius Kwok