Hedge funds posted their lowest annual return on record since 2011, up 1.56% in 2015. Total AUM in hedge funds has grown by US$110 billion in 2015, with more than half of this gain coming from investor flows.

Further, the Eurekahedge Hedge Fund Index was down 0.58% in December, while the MSCI World Index declined 2.23% during the month.

Here are some key takeaways.

  • Among developed market mandates, Japanese managers lead with annual gains of 6.21%, followed by European managers up 5.06% while North American managers trailed behind with a flat performance of 0.03%.
  • Greater China investing hedge funds posted their fourth consecutive month of gains and were up 3.46% in December, 12.08% for AY 2015. China dedicated funds have outperformed the CSI 300 Index by 6.5% in 2015 with gains in Q4 alone coming in at 8.52%.
  • Distressed debt funds have posted the worst return among all hedge fund strategic mandates, down 5.31% — their worst performance on record since 2008. Meanwhile arbitrage strategies have posted the strongest gains in 2015, up 4.46% helped by gains accruing from underlying volatility arbitrage strategies.
  • On a year-to-date basis Asia ex-Japan mandated hedge funds are up 8.35%, the biggest gainer among all hedge fund regional investment mandates and have outperformed the MSCI AC Asia ex Japan Index by over 14%.
  • Eastern Europe and Russia dedicated hedge fund strategies posted the worst returns in December, down 4.48% for the month following the steep downturn in oil prices and the consequent double-digit losses in Russian equities.