Hedge funds, as measured by the Dow Jones Credit Suisse Hedge Fund Index, are up 0.6 per cent year-to-date as of 30 June, posting positive performance for four out of six months in the first half of 2010.
To date in 2010, the hedge fund industry has outperformed global equity markets by over ten per cent as managers continue to employ a diverse range of alpha-generating investment strategies.
Performance among the ten index sectors was mixed with six out of ten sectors posting positive returns in the first half of the year. Top performers included fixed income arbitrage (+5.5 per cent), global macro (+4.2 per cent) and event driven (+1.8 per cent).
Individual fund returns have been more dispersed this year with 51 per cent of all funds posting positive performance compared to 80 per cent for the same period in 2009.
While the repayment of “impaired” assets has slowed, an estimated 67.8 per cent of all impaired assets have been repaid to investors representing USD118bn. The Dow Jones Credit Suisse Hedge Fund Index team estimates an additional USD56bn in impaired assets currently remains illiquid.
The hedge fund industry experienced outflows of approximately USD1.4bn in the first half of 2010. Some strategies, however, saw positive flows in the first six months and those with traditionally lower beta to broad markets experienced some of the largest inflows of the year.
Including performance gains, the team estimates current industry assets under management remain at USD1.5trn as of 30 June 2010.