FAIRFIELD, IOWA APRIL 27, 2022
The hedge fund industry turned back to outflows in February, experiencing -$3.19 billion in net redemptions, -0.07% of industry assets, according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions. Despite the trading losses and redemptions, data coming in from newly added funds led our models to show an increase in hedge fund industry assets to $5.04 trillion.
“Hedge fund subsector flows were an evenly mixed bag in February, with outflows slightly edging out inflows overall. The most significant interest was seen amongst Multi-Strategy hedge funds, which picked up an additional $10 billion. The largest areas of flight were observed among Fixed Income and UCITS funds, which shed more than $8 billion each,” noted Ben Crawford, Head of Research at BarclayHedge. “The action this month was in the realm of managed futures funds, which enjoyed a rising tide of inflows and rode strong performance tailwinds.”
Subsectors reporting inflows in February included Multi-Strategy funds bringing in $10.11 billion; Convertible Arbitrage funds attracting $2.57 billion; Emerging Markets – Global funds adding $2.03 billion; Merger Arbitrage funds with $1.57 billion in inflows; and Sector Specific funds adding $1.18 billion. In proportional terms, the largest uptake was in Convertible Arbitrage funds (+7.25%) followed by Multi-Strategy funds (+1.99%) and Merger Arbitrage funds (+1.65%).
Subsectors contributing most significantly to hedge fund net redemptions included Fixed Income funds shedding -$8.30 billion; Balanced (Stocks & Bonds) funds with -$3.47 billion in outflows; Equity Long Bias funds with -$2.75 billion in redemptions; Emerging Markets – Asia funds seeing -$2.15 billion exit; and Event Driven funds with -$1.98 billion in redemptions. Proportionally speaking, outflows loomed largest for Emerging Market – Latin America funds (-1.28%); Emerging Market – Asia funds (-1.10%); and Fixed Income funds (-0.82%).
The managed futures industry reversed a three-month string of redemptions with $2.93 billion in inflows in February. All four CTA subsectors posted net inflows. Systematic CTAs brought in $2.15 billion (+0.67% of assets); Discretionary CTAs added $495.59 million (+2.77% of assets); Hybrid CTAs saw $282.10 million in inflows (+1.57% of assets); and Multi-Advisor Futures Funds attracted $199.34 million (+0.30% of assets).
12-Month Flow Trends
For the 12 months through February, the hedge fund industry experienced $187.30 billion in inflows. Multi-Strategy funds led a group of 14 hedge fund subsectors recording 12-month inflows through February adding $50.13 billion (+12.72% of assets), over the period.
Other subsectors with notable 12-month inflows included Fixed Income funds with $48.52 billion (+4.92% of assets); Sector Specific funds with $31.18 billion (+9.72% of assets); Balanced (Stocks & Bonds) funds with $23.44 billion (+4.29% of assets); Equity Long-Only funds with $16.04 billion (+7.33% of assets); and Merger Arbitrage funds with $11.98 billion (+13.19% of assets).
Hedge fund subsectors with 12-month outflows included Emerging Markets – Global funds with -$10.13 billion (-5.40% of assets); Macro funds with -$7.62 billion (-4.06% of assets); Equity Long Bias funds with -$6.87 billion (-1.93% of assets); Equity Market Neutral funds with -$2.07 billion (-3.71% of assets); and Emerging Markets – Latin America funds with -$1.48 billion (-13.53% of assets).
For the 12 months through February, three of four CTA subsectors experienced net inflows. Discretionary CTAs brought in $2.68 billion (+17.93% of assets); Hybrid CTAs added $1.85 billion (+11.45% of assets); and Multi-Advisor Futures Funds attracted $1.40 billion (+12.77% of assets).
Systematic CTAs were the lone subsector with 12-month redemptions, -$2.45 billion (-0.86% of assets).
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 6,900 hedge funds, funds of funds and CTAs. Institutional investors, brokerage firms and private banks worldwide utilize BarclayHedge indices as performance benchmarks for the hedge fund and managed futures industries.
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