Hedge funds saw a small decline in performance in August, with an overall weighted average return of -0.8%, marking the first negative month of 2023, according to new data from Citco, although almost half of funds (49.7%) administered by the firm recorded positive returns during the month.
The rate of return spread widened during August to 7.3% from 6.7% in July, indicating a small increase in volatility.
The top performers at a strategy level over the month were global macro funds (0.8% weighted average return), fixed income arbitrage funds (0.7% weighted average return) and event driven funds (0.5% weighted average return).
Investor flows switched back to positive in August, driven by a steep drop in redemptions – subscriptions of $6bn edged out redemptions of $5.2bn overall, resulting in net inflows of $800m.
Hybrid funds saw net inflows of $1.8bn, while fund of funds saw net inflows of $200m, followed by Arbitrage and Global Macro funds at $100m.
Europe saw subscriptions outweigh redemptions for the second month in a row, with funds domiciled there attracting net inflows of $1.8bn.