Hedge Fund Outflows Decelerated Sharply In July - Data

Editorial Staff

21 September 2018

Outflows from the hedge fund industry slowed substantially in July amid mixed signals on trade and the global economy, according to the Barclay Fund Flow Indicator. Hedge fund industry assets rose to an all-time high of $3.1 trillion in July.

Based on figures from more than 5,000 hedge funds in the database, the hedge fund industry (excluding commodity trading advisors) gave up $1.0 billion (-0.03 per cent of assets) in July, slowing nearly nine-fold from redemptions of $8.9 billion (-0.3 per cent of assets) the month before. The back-to-back outflows underscore uncertainties about trade, corporate earnings and global commodities prices, according to the Barclay Fund Flow Indicator.

“Corporate earnings and global equities indexes showed impressive strength in July,” Sol Waksman, founder and president of BarclayHedge, said. “At the same time, hedge fund investors had to weigh July’s good news against the global implications of trade disputes, a rising dollar and declining commodity prices.”

Waksman noted that despite two months of redemptions, hedge fund industry assets climbed by 5.3 per cent year-to-date and by 15.3 per cent over the trailing 12 months.

At the sector level, fixed Income hedge funds saw the heaviest inflows in the trailing 12 months ending in July, adding $24.4 billion (5.0 per cent of assets). Equity Market Neutral funds had the strongest 12-month inflows as a percentage of assets ($16.4 billion, 21.3 per cent of assets).

At the regional level, hedge funds domiciled in the UK and its offshore islands fared the best in July, reeling in $4.6 billion (0.7 per cent of assets). “U.K.-based funds have been immensely popular in recent months,” said Waksman. These funds added $29.3 billion year-to-date and $65.7 billion in the trailing 12 months.