Net Inflows of $23.3 billion in April signaled a continued vote of investor confidence in the hedge fund industry. This result represented an increase in industry AUM of .6% on the month and built momentum on the previous month’s $19.1 billion increase in hedge fund assets, according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions. Industry trading profits exceeded $55.5 billion in April and carried the industry’s aggregate AUM figure past the $4.18 trillion mark.
“In the midst of a brightening economic outlook across the globe, it might be easy to miss the fact that hedge funds have delivered four strong quarters in a row and through a pandemic, no less.” commented Ben Crawford, Head of Research at Backstop BarclayHedge. “Yet when you put that fact into conversation with the stories about glowing economic forecasts, new equity market records and the arrival of an additional $1.9 trillion in U.S. stimulus—then you have a representative set of factors playing out.”
The increase in net inflows was broad-based, with most fund sectors attracting new assets in April. The strongest activity was among Fixed Income hedge funds which reaped an estimated $8.2 billion, followed closely by Multi-Strategy funds which added another $7.1 billion. Sector Specific funds picked up $4.8 billion, Balanced (Stock & Bond) funds saw $2.9 billion and Macro funds added $2.1 billion to AUM. Among the hedge fund sectors experiencing net redemptions in April were Equity Long Bias funds which shed -$4.8 billion in assets, Emerging Markets focused in Asia with -$1.7 billion and Equity Long/Short funds with nearly -$616 million in redemptions.
Hedge funds were not alone in their enjoyment of April net inflows. The managed futures industry extended its streak of positive net inflow months to six in April, picking up another $2.1 billion in assets. All four CTA sectors increased assets during the month. Systematic CTAs added ($1.8 billion, +0.6% of sector AUM), Discretionary CTAs ($292.4 million, +2.0% of sector AUM), Multi-Advisor Futures Funds ($135.8 billion, +1.2% of sector AUM), and Hybrid CTAs increased assets ($10.4 million, +0.1% of sector AUM).
Fund Flows over the Trailing-Twelve-Month Period
Over the 12-month period through April 2021, the hedge fund industry experienced $103.3 billion in net inflows. A $506.4 billion trading profit over the same period pushed aggregate AUM past $4.18 trillion as April closed. A year ago in April the industry AUM was sitting at $2.99 trillion.
The proportion of hedge fund sectors experiencing 12-month net inflows continued to grow during the month, crossing over into majority territory. Fixed Income funds led the way with $61.6 billion in net inflows over the trailing-twelve-month period (+9.1% of sector AUM), while Sector Specific funds brought in ($58.9 billion, +32.3% of sector AUM).
Other sectors adding significantly to assets over the trailing twelve months included Emerging Markets – Asia funds with ($27.7 billion, +26.1% of sector AUM), Event Driven funds ($21.5 billion, 12.9% of sector AUM), Convertible Arbitrage funds ($8.9 billion, +39.2% of sector AUM) and Merger Arbitrage funds taking in ($7.5 billion, +11.1% of sector AUM).
The hedge fund sectors with the largest 12-month net redemptions included Balanced (Stocks & Bonds) funds down -$33.9 billion (-9.4% of sector AUM), Equity Long Bias funds -$21.1 billion (-6.8% of sector AUM), Macro funds -$15.7 billion (-9.1% of sector AUM), Equity Long/Short funds -$10.4 billion (-6.0% of sector AUM), and Equity Market Neutral funds -$9.1 billion (-12.9% of sector AUM).
The CTA industry experienced $21.8 billion in net inflows during the trailing-twelve-month period. A $19.7 billion trading profit over the same interval contributed to $333.7 billion in total industry assets, up from $280.8 billion a year earlier.
All four CTA sectors saw net inflows through April. Systematic CTAs brought in $18.3 billion (+7.0% of sector AUM), Discretionary CTAs $2.0 billion (+18.4% of sector AUM), Hybrid CTAs $1.5 billion (+17.9% of sector AUM), and Multi Advisor Futures Funds took in $88.9 million (+0.8% of sector AUM).
About Backstop Solutions
Backstop’s mission is to help the institutional investment industry use time to its fullest potential. We develop technology to simplify and streamline otherwise time-consuming tasks and processes, enabling our clients to quickly and easily access, share and manage the knowledge that’s critical to their day-to-day business success. Backstop provides its industry-leading cloud-based productivity suite to investment consultants, pensions, funds of funds, family offices, endowments, foundations, private equity, hedge funds and real estate investment firms.
BarclayHedge, a division of Backstop, currently maintains data on more than 7,100 hedge funds, funds of funds and CTAs. The BarclayHedge Indices are utilized by institutional investors, brokerage firms and private banks worldwide as performance benchmarks for the hedge fund and managed futures industries.