Net inflows of USD23.3bn in April put hedge fund assets up nearly 40 per cent year-on-year

Net Inflows of USD23.3 billion in April signaled a continued vote of investor confidence in the hedge fund industry. This result represented an increase in industry AUM of .6 per cent on the month and built momentum on the previous month’s USD19.1 billion increase in assets, according to the Barclay Fund Flow Indicator published by BarclayHedge.

Industry trading profits exceeded USD55.5 billion in April and carried the industry’s aggregate AUM figure past the USD4.18 trillion mark.

“In the midst of a brightening economic outlook across the globe, it might be easy to miss the fact that hedge funds have delivered four strong quarters in a row and through a pandemic, no less,” says Ben Crawford, Head of Research at Backstop BarclayHedge. “Yet when you put that fact into conversation with the stories about glowing economic forecasts, new equity market records and the arrival of an additional USD1.9 trillion in US stimulus — then you have a representative set of factors playing out.”

The increase in net inflows was broad-based, with most fund sectors attracting new assets in April. The strongest activity was among Fixed Income hedge funds which reaped an estimated USD8.2 billion, followed closely by Multi-Strategy funds which added another USD7.1 billion. Sector Specific funds picked up USD4.8 billion, Balanced (Stock & Bond) funds saw USD2.9 billion and Macro funds added USD2.1 billion to AUM. Among the hedge fund sectors experiencing net redemptions in April were Equity Long Bias funds which shed -USD4.8 billion in assets, Emerging Markets focused in Asia with -USD1.7 billion and Equity Long/Short funds with nearly — USD616 million in redemptions.

Hedge funds were not alone in their enjoyment of April net inflows. The managed futures industry extended its streak of positive net inflow months to six in April, picking up another USD2.1 billion in assets. All four CTA sectors increased assets during the month. Systematic CTAs added (USD1.8 billion, +0.6 per cent of sector AUM), Discretionary CTAs (USD292.4 million, +2.0 per cent of sector AUM), Multi-Advisor Futures Funds (USD135.8 billion, +1.2 per cent of sector AUM), and Hybrid CTAs increased assets (USD10.4 million, +0.1 per cent of sector AUM).

Over the 12-month period through April 2021, the hedge fund industry experienced USD103.3 billion in net inflows. A USD506.4 billion trading profit over the same period pushed aggregate AUM past USD4.18 trillion as April closed. A year ago in April the industry AUM was sitting at USD2.99 trillion.

The proportion of hedge fund sectors experiencing 12-month net inflows continued to grow during the month, crossing over into majority territory. Fixed Income funds led the way with USD61.6 billion in net inflows over the trailing-twelve-month period (+9.1 per cent of sector AUM), while Sector Specific funds brought in (USD58.9 billion, +32.3 per cent of sector AUM).

Other sectors adding significantly to assets over the trailing twelve months included Emerging Markets – Asia funds with (USD27.7 billion, +26.1 per cent of sector AUM), Event Driven funds (USD21.5 billion, 12.9 per cent of sector AUM), Convertible Arbitrage funds (USD8.9 billion, +39.2 per cent of sector AUM) and Merger Arbitrage funds taking in (USD7.5 billion, +11.1 per cent of sector AUM).

The hedge fund sectors with the largest 12-month net redemptions included Balanced (Stocks & Bonds) funds down -USD33.9 billion (-9.4 per cent of sector AUM), Equity Long Bias funds -USD21.1 billion (-6.8 per cent of sector AUM), Macro funds -USD15.7 billion (-9.1 per cent of sector AUM), Equity Long/Short funds -USD10.4 billion (-6.0 per cent of sector AUM), and Equity Market Neutral funds -USD9.1 billion (-12.9 per cent of sector AUM).

The CTA industry experienced USD21.8 billion in net inflows during the trailing-twelve-month period. A USD19.7 billion trading profit over the same interval contributed to USD333.7 billion in total industry assets, up from USD280.8 billion a year earlier.

All four CTA sectors saw net inflows through April. Systematic CTAs brought in USD18.3 billion (+7.0 per cent of sector AUM), Discretionary CTAs USD2.0 billion (+18.4 per cent of sector AUM), Hybrid CTAs USD1.5 billion (+17.9 per cent of sector AUM), and Multi Advisor Futures Funds took in USD88.9 million (+0.8 per cent of sector AUM).