Index Flash

Hedge funds returns flat YTD

July 2010

Hedge fund returns were flat to marginally negative in June (-0.50%1) as

most managers steered cautiously through volatile markets. The June
year-to-date returns of the Eurekahedge Hedge Fund Index now stand at
-0.02%. In comparison, the MSCI World Index was down 3.56% in June,
with the year-to-date measure falling to -10.88%.

Below are the highlights for the month:

• Hedge funds remained flat June year-to-date (-0.02%) while

outperforming global markets by nearly 11%.

• Strong launch activity was seen in 1H2010 – more than 500

launches globally.

• UCITS III hedge fund assets crossed US$100 billion during

1H2010.

Main Indices

After experiencing sharp losses in May, hedge fund managers did well to
protect capital in June, which witnessed a very volatile market
environment. The month was marked by sharp trend reversals and
erratic price movements across most asset classes as the VIX registered
an increase of 8%. Although hedge fund returns for most regions were
negative, managers characteristically outperformed their respective
market indices.

Latin American hedge funds delivered the best returns, gaining 0.95%
during the month and outperforming the MSCI Latin America Index,
which returned -1.11% with 26.3% volatility. Latin American managers
mostly profited from defensive positions in the equity sector to bring the
Eurekahedge Latin American Hedge Fund Index to 1.47% June year-to-
date. Broader emerging markets hedge funds were also marginally
positive with gains of 0.15% while Asia ex-Japan funds returned 0.14%
for the month.

June 2010 2010 2009

Index
Est1 Returns Returns
Eurekahedge Hedge Fund Index -0.50 -0.02 19.63
Eurekahedge Fund of Funds Index -0.66 -1.11 9.76
Eurekahedge Long-Only Absolute
-0.77 -0.79 46.93
Return Fund Index

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 Index Flash

Hedge funds returns flat YTD

Eurekahedge Islamic Fund Index 0.03 -1.13 21.52

Regional Indices

June 2010 2010 YTD 2009

Index
Est1 Returns Returns
Eurekahedge North American Hedge
-0.91 0.82 23.82
Fund Index
Eurekahedge European Hedge Fund
-0.78 0.33 20.39
Index
Eurekahedge Eastern Europe & Russia
-2.29 0.58 61.14
Hedge Fund Index
Eurekahedge Japan Hedge Fund
-2.13 1.28 7.26
Index
Eurekahedge Emerging Markets
0.15 -0.65 34.97
Hedge Fund Index
Eurekahedge Asia ex-Japan Hedge
0.14 -3.13 38.11
Fund Index
Eurekahedge Latin American Hedge
0.95 1.47 27.52
Fund Index

Strategy Indices

Most hedge fund strategy indices ended the month in negative territory,
with long/short equity managers suffering the most losses. The
Eurekahedge Long/Short Equity Hedge Fund Index was down 1.12% in
June as global equity markets remained on the edge throughout the
month. Most other strategies were marginally in the red, while fixed
income continued to deliver solid gains on the back of rallying bond
prices. CTA/managed futures funds were positive for the month, gaining
0.55% as most managers successfully navigated through the range-
bound but choppy markets. Managers employing volatility arbitrage and
dispersion strategies were also up during the month, gaining 0.51% on
average.

June 2010 2010 YTD 2009

Index
Est1 Returns Returns
Eurekahedge Arbitrage Hedge Fund
-0.38 1.70 22.66
Index
Eurekahedge CTA/Managed Futures
0.55 -0.05 2.66
Hedge Fund Index
Eurekahedge Distressed Debt Hedge
-0.06 6.42 34.35
Fund Index
Eurekahedge Event Driven Hedge
-0.92 2.15 39.15
Fund Index
Eurekahedge Fixed Income Hedge
0.48 3.73 21.55
Fund Index
Eurekahedge Long/Short Equities
-1.12 -1.75 23.56
Hedge Fund Index
Eurekahedge Macro Hedge Fund
-0.52 0.64 12.64
Index
Eurekahedge Multi-Strategy Hedge
-0.48 0.31 21.19
Fund Index
Eurekahedge Relative Value Hedge
-0.65 1.67 21.52
Fund Index

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 Index Flash

Hedge funds returns flat YTD

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1
Based on 51.52% of the funds reporting their NAV for June 2010 as at 13 July 2010.
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