Investors renewed their interest in the hedge fund industry in November after two-months of outflows, adding USD5.4 billion to a variety of fund types this past month.
That’s according to the latest Hedge Fund Asset Flows Report from eVestment, which reveals that, with performance gains added in, hedge fund industry AUM was up to USD3.070 trillion in November.
Despite recent performance putting managed futures strategies among the industry’s best performers in 2014, investors have been slow to shift allocation decisions in managed futures strategies’ favour. Both macro and managed futures funds faced redemptions in November of USD4.10 billion and USD4.11 billion respectively.
Positive investor allocation trends which had persisted for several months leading up to September and October’s volatility resumed in November. Namely flows into equity, including both long/short (up USD4.54 billion) and event driven (up USD2.11 billion) and multi-strategy (up USD4.79 billion) led the industry.
The flows into equity exposure were important because they show a level of continued support for the group in the face of recent volatility. While redemptions may still emerge in the coming months resulting from September/October, with the underlying trend in their favor the net effect may be muted.
Credit strategies are going through a difficult period. Flows are mixed, with investor preferences leaning to directional strategies in the face of persistent/declining rates.
Interest in exposure to Asia was elevated, with Asia-focused strategies seeing inflows of USD1.66 billion in November.
Commodity fund flows were slightly positive in November, adding USD720 million. This is meaningful given the big price moves in energy and metals over the last three months and will be an interesting area to watch.
