Hedge funds add USD5.6bn in August

Hedge funds posted a third consecutive month of inflows in August, adding USD5.6 billion in new assets to July’s USD10.5 billion in inflows and June’s USD15.1 billion as the industry continued its rebound from spring’s pandemic-driven redemptions.

August’s inflows represented 0.2 per cent of industry assets, according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions.

Coupled with a USD42.6 billion trading profit in August, the month’s inflows brought total industry assets to USD3.36 trillion as August ended, up from USD3.26 trillion at the end of July.

Data from 6,900 funds (excluding CTAs) in the BarclayHedge database showed Fixed Income funds leading the way for August, bringing in USD5.5 billion.

“While Covid-19 remained a force to be reckoned with, economies began to recover in the summer months and equity markets rebounded from their spring pandemic losses,” says Sol Waksman, president of BarclayHedge. “Investor sentiments continued to be buoyed by data that suggested the worst might be over for the economy, signs that many businesses were finding ways to adapt to the crisis and optimism about the development of a vaccine.”

Over the 12-month period through August the hedge fund industry experienced USD134.1 billion in outflows. The industry posted an USD85.1 billion trading profit over the period, however, bringing total industry assets to USD3.36 trillion as August ended, up from USD3.26 trillion at the end of July.

Five hedge fund sectors posted 12-month inflows for the period through the end of the month. Sector Specific funds led the way bringing in USD23.5 billion in new assets over the period, 13.7 per cent of assets, followed by Event Driven funds with USD13.7 billion in inflows, 8.1 per cent of assets, and Convertible Arbitrage funds adding USD3.6 billion, 17.2 per cent of assets. Balanced (Stocks & Bonds) funds brought in USD2.8 billion over the 12 months, 0.9 per cent of assets, while Emerging Markets – Latin America funds added USD720.4 million, 6.4 per cent of assets.

Hedge fund sectors with the largest 12-month redemptions included Equity Long/Short funds which shed USD33.3 billion in assets over the period, 16.7 per cent of assets, Fixed Income funds which experienced USD31.3 billion in outflows, 4.9 per cent of assets, Equity Long Bias funds which saw USD23.9 billion in 12-month redemptions, 7.1 per cent of assets, and Macro Funds which shed USD18.6 billion, 9.5 per cent of assets.

Managed futures funds posted a second straight month of inflows in August bringing in USD4.9 billion in new assets. Three of the four CTA sectors tracked experienced inflows in August. After a USD137.2 million trading loss for the month, total industry assets stood at USD304.9 billion as August ended, up from USD296.7 billion at the end of July.

For the 12-month period through August, CTAs experienced redemptions of USD3.8 billion, 1.3 per cent of assets. A USD13.6 billion trading loss over the period contributed to the industry’s USD304.9 billion total asset figure.