Hedge funds lose big in June as outflows jump

Tuesday, 16 Jul 2013 | 11:04 AM ET
Adam Jeffery | CNBC

Hedge funds across the world posted their largest loss for 12 months in June, as heightened fears of slowing growth in China and the tapering of the Federal Reserve's bond buying program hit performance, new research has found.

Total assets under management declined by $21 billion over the month to $1.89 trillion, according to hedge fund database Eurekahedge. This decline was mostly a result of poor performance, with managers losing a total of $18.84 billion in June.

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As a result, the the Eurekahedge Hedge Fund Index slipped 0.69 percent in June, ending a 7 month winning streak.

Fixed income and North American hedge funds both suffered their largest performance-based decline in almost two years, according to the report, with North American funds experiencing their first month of negative flows this year. Europe, Latin America and Asia ex-Japan hedge funds also saw outflows over the month.

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"June witnessed some heightened risk aversion in global markets amid slowing economic growth in China and the US Federal Reserve's indications that it might scale back its bond buying program," the report said. "With the exception of Japan, all regional mandates ended the month in negative territory with Asia ex-Japan focused hedge funds seeing the largest decline."

Japan-focused hedge funds saw positive asset flows in June after a 12-month run of outflows, which saw funds investing in Japan losing $4 billion between June 2012 and May this year.

By CNBC's Jenny Cosgrave: Follow her on Twitter @jenny_cosgrave