Hedge fund industry AUM swells to USD4.32tn in June

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Investors diverted an additional USD16.6 billion to hedge funds in June. The month’s inflows represented 0.4 per cent of assets and continued an inflow trend that saw USD36 billion in new assets in May, USD23.3 billion in April and USD19.1 billion in March, according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions.

A USD16.8 billion June trading profit brought total hedge fund industry assets to more than USD4.32 trillion.

“As positive economic trends continued, investors saw opportunity in hedge funds in June,” says Ben Crawford, Head of Research at BarclayHedge. “Rallies in equity and energy markets and declining unemployment numbers through the spring months contributed to investor confidence as did economic growth in the US and China and surging commodity prices as business activity accelerated.”

Most hedge fund sectors added to assets in June. Fixed Income funds led the way bringing in +USD8.4 billion, followed by Balanced [Stocks & Bonds] (+USD4.4 billion), Multi-Strategy funds (+USD2.3 billion) and Sector Specific funds (+USD1.9 billion).

Just a handful of sectors experienced net redemptions in June. They included Equity Long/Short funds which shed -USD2.1 billion, Event Driven funds (-USD1.0 billion) and Emerging Markets – Global (-USD717.4 million).

After seven consecutive months of inflows, the managed futures industry reversed course in June with -USD3.1 billion in redemptions, equivalent to a loss of -0.9 per cent of its assets. A -USD1.4 billion trading loss in June brought total CTA industry assets to USD339.9 billion at the end of the month.

“In contrast to Hedge Fund investors, CTA investors appeared somewhat more circumspect in June. We observed investors booking profits and trimming positions in June, breaking a seven-month run of net inflows for the managed futures industry,” says Crawford. “Whether it was news of the astonishingly-contagious Covid-19 ‘Delta variant’ or the curiously persistent ‘transitory’ inflation figures, it appears that at least some investors received a moment’s pause in June.”

The four CTA sectors tracked were split between inflows and redemptions for the month. While Hybrid CTAs added +USD165.3 million (+0.9 per cent of assets) and Multi Advisor Futures Funds were up +USD63.2 million (+0.5 per cent of assets), the much larger Systematic CTA suffered net outflows of -USD3.1 billion (-1.0 per cent of assets) and Discretionary CTAs gave up -USD131.7 million (-0.5 per cent of assets).

For the trailing 12 months ending in June, the hedge fund industry experienced USD148.8 billion in net inflows. A USD459.2 billion trading profit over the same period brought total industry assets to the USD4.32 trillion figure, up from USD4.27 trillion in May and USD3.11 trillion a year earlier.

Most hedge fund sectors continued to post 12-month inflows with 11 sectors adding to their war chests through June. Fixed Income funds were the sector leader bringing in +USD73.6 billion (+10.5 per cent of assets), while Sector Specific funds added +USD55.8 billion (+27.9 per cent of assets), and Emerging Markets – Asia funds saw +USD28.8 billion in inflows, and increase of +25.2 per cent of assets.

Others sectors adding to assets over the 12 months included Multi-Strategy funds with +USD20.0 billion (+5.8 per cent of assets), Event Driven funds +USD19.5 billion (+11.1 per cent of assets), and Merger Arbitrage funds USD8.2 billion (+10.4 per cent of assets).

Hedge fund sectors with the largest 12-month outflows included Balanced (Stocks & Bonds) funds with USD31.9 billion (-8.2 per cent of assets), Equity Long Bias funds -USD16.7 billion (-5.3 per cent of assets), Macro funds -USD16.0 billion (-9.2 per cent of assets), Equity Long/Short funds -USD8.4 billion (-5.1 per cent of assets), and Equity Market Neutral funds down -USD6.9 billion (-10.8 per cent of assets)

Over the trailing 12 months ending in June, the managed futures industry saw USD21.1 billion in net inflows. A USD21.8 billion trading profit over the period brought total industry assets to the USD339.9 billion figure at the end of June, up from USD283.1 billion a year earlier.

All four CTA sectors tracked reported 12-month inflows through June. Systematic CTAs were up +USD16.6 billion (+6.3 per cent of assets), Discretionary CTAs +USD2.7 billion (+24.3 per cent of assets), Hybrid CTAs +USD1.8 billion (+21.4 per cent of assets) and Multi Advisor Futures Funds +USD114.0 million (+1.1 per cent of assets).
 

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