Hedge funds returned on average 0.43 percent during the first seven months of 2018, the worst performance since 2008 when hedge fund returns declined 0.23 percent during the same time period, according to data provider Eurekahedge.
Only 49 percent of funds generated positive returns and about 13 percent posted double digit gains, Eurekahedge reported, citing its Global Hedge Fund Database.
Performance-driven losses and subdued allocations from investors have also capped asset growth, the data provider said.
Total assets under management have increased by only US$6.8 billion during the year to date, down from US$126.7 billion over the same period last year. Among the various investment strategies assets under management for CTAs and managed futures strategies dropped by almost 12 percent in 2018, or $30.7 billion, this year.
Concerns over a U.S.-Chinese trade war have particularly affected Asia-invested funds. Eurekahedge’s Asian Hedge Fund Index dropped 1.61 percent this year after having posted gains of 17.1 percent in 2017. Japanese funds are down 2.19 percent for the year.
Other regional indices have posted modest gains. Latin American fund managers are leading the performance with gains of 3.89 percent in the first seven months of the year.
In July, the Eurekahedge Hedge Fund Index rose 0.41 percent, buoyed by the stock market performance in North America and Europe on the basis of strong corporate earnings in the second quarter.