Introduction
Hedge funds posted an average return of -2.13%1 in August, outperforming global equity markets by 5.57% as managers focused on capital preservation strategies. The MSCI World Index tumbled 7.70% off the back of a downgrade of US Treasuries, which also sent the S&P Goldman Sachs Commodity Index down by 1.85% for the month. Managers lost US$3.2 billion of assets through performance, but capital flows from investors continued to be very robust as August marked the ninth consecutive month of positive flows; an increase of US$1.51 billion. Overall hedge fund assets under management remained above the US$1.8 trillion mark, the highest level since September 2008.
Highlights of hedge fund performance and asset flows for the month are as follows:
| August 2011 | US$ billion |
|---|---|
| Allocation (Inflows) | 24.06 |
| Redemption (Outflows) | -22.55 |
| Net Asset Flows | 1.51 |
| Positive Performance (Growth) | 116.04 |
| Negative Performance (Decline) | -119.22 |
| Total | -3.18 |
| Overall Total | -1.66 |
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Footnote
1Based on 67.66% of funds which have reported August 2011 returns as at 16 September 2011
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