Hedge funds just logged their second best month since 2003 according to Eurekahedge, rising 3.45% in September. It’s the third straight month of positive returns, and year-to-date they’re up 5.15%.
Asia Ex-Japan funds in particular are on fire, notching over a 6% return in a single month as capital pouring into Asian markets has pushed up equity prices across the region. Funds targeting Japan, however, have done the worst:
Investor inflows into hedge funds hit a six-month high in August, at $11 billion according to TrimTabs and BarclayHedge, and the monster results of September likely means that hedge funds’ resurgent popularity is set to continue.
Yet there’s one peculiar catch — larger hedge funds have performed far better than smaller ones. Funds with over $500 million of assets were up 6.35% according to Eurekahedge, which amounts to a substantial outperformance of the 3.45% return for the industry.
Perhaps that’s why even as returns are good and investor money is flowing, some smaller funds are being forced to shut down. One example is the firm Amoeba Capital in Singapore, with just $135 million under management, who despite having delivered 67% returns since inception and 5.1% gains year-to-date, has chosen to shut down due to investor redemptions according to FinAlternatives.
So hedge funds are back.. but the big boys are dominating.