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May 2010 Asset Flows Update
Hedge funds had a mixed month in May, witnessing widespread losses due to performance while alsoattracting significant capital. The Eurekahedge Hedge Fund Index was down 2.33% in what was the worstmonth for the industry since October 2008. The sector, however, outperformed the underlying marketssignificantly as the MSCI World Index slid 9.91% during the month.Furthermore, hedge fund managers attracted significant capital in May as investors took into account thestrong performance of the sector in the first four months of the year. Performance-based losses of US$16.68billion were partially countered by the net inflows of US$5.44 billion, making it the fourth consecutive monthof net inflows.Hedge funds also continue to remain in positive territory when considering year-to-date performance, withthe average hedge fund up 0.78% May year-to-date. Although this is the worst May year-to-date returns of the index since its inception, it still shows hedge funds to be ahead of global markets, which are down7.64% for the year ± an outperformance of 8.42%.Figure 1 shows the monthly asset flows across the hedge fund industry since December 2008.
Figure 1: Summary Monthly Asset Flow Data since December 2008
Below are the highlights for the month of May:
Hedge funds witnessed worst month since November 2008.
North American hedge funds saw four consecutive months of positive net asset flows, attractingUS$25 billion since February.
UCITS III funds attracted US$5 billion capital in the first five months of the year.