The global hedge fund industry logged gains across all types of investment strategy in August, buoyed by rising equities, despite headwinds from weaker European growth and geopolitical worries.

The global hedge fund industry logged gains across all types of investment strategy in August, buoyed by rising equities, despite headwinds from weaker European growth and geopolitical worries, according to data from Chicago-based Hedge Fund Research.

The HFRI Fund Weighted Composite Index rose 1.6 per cent in August, the strongest month since February, with gains across all strategies, led by a rise in macro & commodity trading advisor strategies. Over the year to date so far, the MSCI World Index of developed countries’ shares shows total returns (capital plus reinvested dividends) of 6.6 per cent, beating the HFRI Fund Weighted Composite Index for the same period at 4.1 per cent. In recent years, hedge funds have lagged long-only investments at times, putting pressure on managers to boost performance or cut their traditionally high fees.

The HFRI Macro Index posted a gain of 2.1 per cent, the strongest monthly gain since April 2011. While macro gains were spread across most constituent sub-strategies, gains were led by quantitative, trend-following CTA strategies, with the HFRI Macro: Systematic Diversified/CTA Index advancing 3.1 per cent.

CTA strategies have endured a challenging environment in recent years, posting declines in each of the prior three calendar years, resulting in capital redemptions of $12.5 billion over the trailing five quarters.

Equity Hedge strategies advanced in August, with the HFRI Equity Hedge Index gaining 1.6 per cent, the third strongest monthly gain for 2014, bringing performance so far this year to 3.9 per cent.

Fixed income-based relative value arbitrage strategies also advanced in August, the eleventh gain over the trailing 12 months, as yields fell across most issues and high yield credit tightened. The HFRI Relative Value Arbitrage Index gained 0.9 per cent, extending year-to-date returns to 5.7 per cent.

The HFRI Event Driven Index rose 0.37 per cent, extending the YTD gain for this segment to 4.1 per cent.

Pullouts

Separately, BarclayHedge and TrimTabs Investment Research have reported that the hedge fund industry redeemed just $40 million in July, the first monthly outflow of the year, after taking in $5.1 billion (or 0.2 per cent of assets) in June.

“While hedge fund flows were essentially flat in July, inflows in the first seven months of the year totalled $80.1 billion, the highest inflows from January through July since 2007,” said Sol Waksman, president and founder of BarclayHedge.  The industry took in $35.0 billion in the same period in 2013. Industry assets rose to a six-year high of $2.33 trillion in July, according to estimates based on data from 3,468 funds.