Hedge funds post a second straight month of inflows adding USD10.5bn in July, says Backstop BarclayHedge
Hedge funds experienced a second straight month of inflows in July, bringing in USD10.5 billion as the industry continued to shake off spring’s pandemic-driven redemption trend.
July’s new assets built on June’s USD15.1 billion in inflows.
July’s inflows represented 0.3 per cent of industry assets, according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions.
With a USD32.1 billion trading profit in July, total hedge funds industry assets stood at nearly USD3.26 trillion as July ended, up from USD3.11 trillion a month earlier.
Data from 6,900 funds (excluding CTAs) in the BarclayHedge database showed Balanced (Stocks & Bonds) funds leading the way in bringing in new assets, adding USD6.7 billion in July.
“Investors clearly took comfort in the rebound in equity markets as the spring months progressed,” said Sol Waksman, president of BarclayHedge. “Meanwhile, the pace of economic recovery in regions that were first to suffer the impacts of the Covid-19 pandemic was reflected in regional fund inflows.”
Over the 12-month period through July the hedge fund industry experienced USD150.9 billion in redemptions. The industry posted a USD32.1 billion trading profit through July, which, along with June and July inflows, brought total industry assets to nearly USD3.26 trillion, an increase from USD3.11 trillion at the end of June and up from USD3.12 trillion a year earlier.
There was a new addition to the fund sectors posting 12-month inflows in July with Balanced (Stocks & Bonds) funds joining the mix. Sector Specific funds led the way adding USD20.5 billion over the period, 11.8 per cent of assets, Event Driven funds brought in USD18.1 billion, 10.8 per cent of assets, Balanced (Stocks & Bonds) saw inflows of USD5.4 billion, 1.6 per cent of assets, Convertible Arbitrage funds added USD3.6 billion, 17.6 per cent of assets, and Emerging Markets – Latin America funds brought in USD653.6 million, 4.9 per cent of assets.
Hedge fund sectors with the largest 12-month redemptions included Fixed Income funds with USD45.0 billion in redemptions, 7.0 per cent of assets, Equity Long/Short funds shedding USD35.4 billion, 17.5 per cent of assets, and Equity Long Bias funds experiencing USD24.1 billion in outflows, 7.1 per cent of assets.
Managed futures funds returned to inflows in July adding USD7.2 billion with all four CTA sectors tracked experiencing net inflows for the month. A USD3.7 billion trading profit in July brought total industry assets to USD296.7 billion as the month ended, up from USD283.1 billion at the end of June.
CTA funds in the US and the UK played the lead roles in the managed futures industry’s July inflow performance with U.S. funds adding nearly USD3.7 billion during the month, 2.1 per cent of assets, while funds in the UK and its offshore islands brought in USD3.3 billion, 5.2 per cent of assets.
On the redemption side of the ledger, managed futures funds in Continental Europe experienced USD102.0 million in redemptions, 0.3 per cent of assets, and CTAs in Asia excluding China and Japan shed USD15.4 million, 0.2 per cent of assets.
For the 12 months through July, the managed futures industry experienced redemptions of USD13.8 billion, 4.2 per cent of industry assets. A USD14.4 billion trading loss over the period contributed to the industry’s USD283.1 billion total asset figure as July ended, down from USD327.3 billion a year earlier.