Hedge Funds Lose $1.9 Billion in April Despite Bounce in Equities Markets and Declining Volatility. Commodity Fund Outflows Jump Fourfold while Oil Prices hit 41-Month High.

FAIRFIELD, Iowa, June 18, 2018 — Hedge fund investors turned cautious in April 2018, according to the Barclay Fund Flow Indicator, even as the equities markets rebounded and volatility began to calm down. Industry assets leveled off at an all-time high of $3.0 trillion.

Data drawn from more than 5,000 hedge funds in the BarclayHedge database estimated that the hedge fund industry (excluding CTAs) redeemed $1.9 billion (0.1% of assets) in April, the first net outflow of 2018 and a turnabout from inflows of $6.1 billion (0.2% of assets) in March. Industry assets climbed 3.3% year-to-date and surged 22.5% over the trailing 12 months, according to the Barclay Fund Flow Indicator, a monthly big-picture report on the health of the alternative investments industry.

“Though hedge fund investors seemed a bit skittish in April, the industry has fared well over a longer time frame,” said Sol Waksman, founder and president of BarclayHedge. “Hedge funds took in $26.3 billion (0.9% of assets) year-to-date and $108.2 billion (4.3% of assets) in the trailing 12 months.”

Fixed Income hedge funds enjoyed the heaviest inflows in the trailing 12 months ending in April, adding $31.9 billion (6.8% of assets), the Barclay report estimated. Macro funds suffered the heaviest outflows in the same time span, redeeming $15.6 billion (-7.1% of assets).

At the regional level, hedge funds focusing on the U.K. had the highest April inflows at $3.3 billion (0.5% of assets). U.S.-focused funds saw the heaviest outflows, redeeming $1.3 billion (-0.1% of assets).

“Funds focusing on the U.S. had the most redemptions for the second month in a row despite healthy corporate earnings in April and solid economic fundamentals,” Waksman said. “Investors seem to be seeing U.K. funds as a haven from anxieties about trade and tariffs.”

In the managed futures sector, commodity trading adviser (CTA) funds endured a second month of outflows in April even as oil prices hit a 41-month high. Redemptions from CTAs jumped more than fourfold to $1.3 billion (-0.4% of assets) by month’s end, according to the Fund Flow Indicator. Industry assets totaled $367.1 billion in April, down slightly from the month before.

“Despite a rough couple of months for CTA funds, the rising tide in worldwide commodity prices is lifting boats across the managed futures sector,” Waksman said. “CTA assets have swelled 11.8% from their interim low of $328.2 billion in October 2014.”

The Barclay Fund Flow Indicator is published monthly, with comprehensive results available here.

Sol Waksman is an experienced media source, providing perspectives on hedge fund and managed futures trends. For more commentary or background, call 641-472-3456 or email swaksman@barclayhedge.com.

BarclayHedge is the global leader in providing independent, research-based information services to the alternative investment industry. Founded in 1985, Barclay currently maintains data on more than 6,400 hedge funds, fund of funds, and CTAs. No one has been in the business of collecting alternative investment data longer than BarclayHedge.

Institutional investors, brokerage firms, and private banks worldwide utilize BarclayHedge indices as performance benchmarks for the hedge fund and managed futures industries.