Hedge funds reversed course in June from the pandemic-driven redemption trend of prior months, posting USD15.1 billion in inflows. It was a significant turnaround from USD8.0 billion in outflows in May, USD38.1 billion in April and USD85.6 billion in redemptions in March.
July’s inflows represented 0.5 per cent of industry assets, according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions.
The hedge fund industry turned in another profitable trading month as well, earning a USD34.7 billion trading profit and bringing total industry assets to more than USD3.11 trillion as the month ended.
Data from 7,000 funds (excluding CTAs) in the BarclayHedge database showed Balanced (Stocks & Bonds) funds leading the way in bringing in new assets in June with USD13.8 billion in inflows.
“As the spring months progressed, there was a growing sense of investor optimism that the worst of the pandemic’s economic damage was behind us,” says Sol Waksman, president of BarclayHedge. “As unemployed figures declined and stock markets recovered, investors began coming back to hedge funds.”
Over the 12-month period through June, hedge funds experienced USD169.5 billion in redemptions. Coupled with June’s inflows, a USD34.7 billion trading profit during the month brought industry assets to more than USD3.11 trillion as June ended, up from USD3.04 trillion at the end of May but down from USD3.15 trillion a year earlier.
Hedge funds posting 12-month inflows through June were led by Event Driven funds which brought in USD21.0 billion over the period, 12.8 per cent of assets. Sector Specific funds added USD15.1 billion, 8.7 per cent of assets, Convertible Arbitrage funds took in USD3.2 billion, 15.7 per cent of assets, and Emerging Markets – Latin America funds added USD1.0 billion, 8.1 per cent of assets.
Sectors with the largest 12-month redemptions included Fixed Income funds with USD46.7 billion in outflows, 7.0 per cent of assets, Equity Long/Short funds with USD41.3 billion in redemptions, 20.1 per cent of assets, and Equity Long Bias funds which shed USD19.6 billion, 5.9 per cent of assets.
The managed futures industry reversed course from May’s USD1.3 billion in inflows with USD440.2 million in redemptions in June. A USD1.4 billion trading loss brought industry assets to USD283.1 billion as the month ended, down from USD284.1 billion at the end of May.
For the 12 months through June, the managed futures industry experienced USD23.6 billion in redemptions, 7.3 per cent of industry assets. A USD10.4 billion trading loss over the period contributed to the industry’s USD283.1 billion total asset figure at the end of June, down from USD324.8 billion a year earlier.
