Hedge funds closed the final month of the year in positive territory. The Eurekahedge Hedge Fund Index was up 0.25% in December, while the MSCI World Index finished the month down 0.8%.
As institutions invest less in traditional hedge funds, managers are considering new products to attract investors, says EY’s 2014 global hedge fund and investor survey.
Hedge funds are up 3.45% year-to-date, with roughly 18% of funds boasting double-digit returns for the year, half the number for the same period last year, finds the latest Eurekahedge Report.
Recent decisions by two large U.S. public pension plans to pull back from hedge fund investments, and the likelihood of a sixth consecutive calendar year of return averages underperforming broad equity market returns, are not expected to curb investors' overall allocations to hedge funds, says Fitch Ratings.
As asset growth in traditional hedge funds from institutional investors continues to slow, hedge fund managers are pinning their hopes on the power of new products to attract investor assets and drive growth.
Hedge funds were up 3.82% year-to-date, registering performance-based gains of US$56.4 billion while witnessing net asset inflows of US$60.7 billion in 2014, according to the Eureka Hedge Fund Report. Currently, assets under management of funds of hedge funds have recovered to US$529.3 billion, an increase of US$5.7 billion from December 2013.
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The largest pension fund in the United States plans to end its hedge fund program in an effort to simplify its investment portfolio and reduce costs.
Hedge funds rebounded strongly in August, with the Eurekahedge Hedge Fund Index up 1.36%, while the MSCI World Index gained 2.48%.
Partnerships between hedge funds and their investors are becoming more common.