Hedge fund allocations soar
The hedge fund industry continued to attract new assets in August with USD30.5 billion in inflows. August’s inflows represented 0.69 per cent of industry assets, according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions.
August marked the sixth consecutive month of hedge fund industry inflows, totalling USD143.8 billion since March. A USD37.8 billion monthly trading profit brought total industry assets to nearly USD4.52 trillion as August ended.
“As economies continued to rebound and equity markets surged throughout the summer, investors saw growth and speculative opportunities in hedge fund investments,” says Ben Crawford, Head of Research at BarclayHedge. “Hedge Funds may also be having a moment for less optimistic reasons: They have a history of performing well during inflationary periods. While central bankers contend that the recent spike in the cost of living will be transitory, forecasters in the U.S. and elsewhere are revising their inflation expectations upward for multiple periods to come.”
Most hedge fund sub-sectors reported inflows in August. Fixed Income funds set the pace bringing in USD10.4 billion, 1.1 per cent of assets while Multi-Strategy funds added USD7.5 billion, 1.6 per cent of assets, Balanced (Stocks & Bonds) funds saw USD5.1 billion in inflows, 0.8 per cent of assets, Sector Specific funds added USD2.96 billion, 0.8 per cent of assets, and Event Driven funds brought in USD2.28 billion, 0.8 per cent of assets.
The handful of sub-sectors experiencing net redemptions in August included Emerging Markets – Global funds shedding USD2.7 billion, 1.3 per cent of assets, Emerging Markets – Asia funds with USD2.47 in outflows, 1.3 per cent of assets, Convertible Arbitrage funds with USD769.2 million in redemptions, 2.4 per cent of assets, and Equity Market Neutral funds with USD251.5 million in outflows, 0.4 per cent of assets.
After posting inflows in July, the managed futures industry returned to net redemptions in August with USD168.6 million in outflows. The four CTA sub-sectors tracked were evenly split between inflows and redemptions during the month.
Discretionary CTAs brought in USD672.2 million in August, 4.3 per cent of assets, while Multi Advisor Futures Funds saw USD152.3 million in inflows, 1.2 per cent of assets. On the redemption side of the ledger, Systematic CTAs shed USD763.6 million during the month, 0.24 per cent of assets, while Hybrid CTAs experienced USD77.7 million in outflows, 0.42 per cent of assets.
For the 12 months through August the hedge fund industry experienced USD146.8 billion in inflows. A USD103.6 billion trading profit over the period brought total industry assets to USD4.52 trillion as August ended, up from USD4.40 trillion at the end of July and up from nearly USD3.38 trillion a year earlier.
Of the 19 hedge fund sub-sectors tracked, 12 posted 12-month inflows through August. Fixed Income funds led the way adding USD78.7 billion, 10.2 per cent of assets, while Sector Specific funds brought in USD56.6 billion, 25.3 per cent of assets, and Multi-Strategy funds saw USD25.6 billion in inflows, 7.4 per cent of assets.
Other hedge fund sectors posting notable 12-month inflows included Emerging Markets – Asia funds adding USD22.0 billion, 17.1 per cent of assets, Event Driven funds bringing in USD21.5 billion, 11.3 per cent of assets, and Equity Long-Only funds with USD13.1 billion in inflows, 8.9 per cent of assets.
Among the sectors with the largest 12-month outflows were Balanced (Stocks & Bonds) funds with USD28.2 billion in redemptions, 6.2 per cent of assets, Equity Long Bias funds shedding USD15.3 billion, 4.6 per cent of assets, Macro funds with USD13.3 billion in outflows, 7.3 per cent of assets, Equity Market Neutral funds with USD5.7 billion in redemptions, 9.3 per cent of assets, and Equity Long/Short funds with USD4.0 billion in outflows, 2.3 per cent of assets.
Over the 12 months through August CTAs saw USD9.72 billion in inflows. A USD21.6 billion trading profit over the period brought total industry assets to USD339.9 billion, up from USD304.8 billion a year earlier.
All four CTA sectors tracked posted inflows over the 12-month period. Systematic CTAs set the pace with USD4.9 billion in inflows, 1.7 per cent of assets. Discretionary CTAs added USD3.1 billion, 27.2 per cent of assets, Hybrid CTAs brought in USD1.7 billion, 18.1 per cent of assets, and Multi Advisor Futures Funds saw USD660.2 million in inflows, 6.4 per cent of assets.