FAIRFIELD, IOWA JANUARY 27, 2022
The hedge fund industry extended its monthly inflow streak to nine consecutive months in November, bringing in $19.3 billion in new assets. November’s inflows represented 0.41% of hedge fund industry assets, according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions.
Over the course of its nine-month streak, the hedge fund industry has added $199.8 billion in new assets.
Total hedge fund industry assets under management stood at nearly $4.69 trillion as November ended, following a trading loss of nearly $40.0 billion during the month.
“Stock market volatility through early fall, along with inflation fears – and the central banks’ anticipated responses – prompted investors to continue looking at hedge funds as a source of yield and potentially as a shield,” said Ben Crawford, Head of Research at BarclayHedge. “This ninth-straight month of growth was the continuation of an almost preternaturally stable trend in industry AUM that has followed in the wake of the COVID crash. It’s a remarkable show of sustained and steadily increasing investor confidence in hedge funds.”
Most sub-sectors had positive net inflows in November, despite the fact that the majority of hedge fund sub-sectors suffered trading losses. In dollar terms, the winning subsectors were led by Multi-Strategy funds, which attracted $5.5 billion during the month; Balanced (Stocks & Bonds) up $4.8 billion; and Emerging Markets – Asia funds, which added $2.8 billion.
Sub-sectors posting net redemptions in November included Emerging Markets – Global funds, with $2.2 billion in outflows; Macro funds, shedding $449.5 million; and Merger Arbitrage funds, down $60.8 million. In relative terms, Emerging Markets – Global funds fared the worst, seeing their average AUM dip -1.02%. Macro funds gave up 22 basis points worth of AUM, while Merger Arbitrage funds shed 7 bps.
As for the managed futures industry, after posting inflows in October, many CTAs slipped back into net redemptions in November, giving back -$2.8 billion in net outflows. The four CTA sectors tracked were evenly split between monthly inflows and outflows. Multi Advisor Futures Funds and Discretionary CTAs gained assets, while Systematic and Hybrid traders lost ground. Multi Advisor Futures Funds were the big mover, increasing their assets by 4.91%.
12-Month Flow Trends
For the 12 months through November, the global hedge fund industry experienced $221.1 billion in inflows. A nearly $252.0 billion trading profit over the period brought total industry assets to the $4.69 trillion figure at the end of the month, up from $4.66 trillion at the end of October and up from $3.83 trillion a year earlier.
Of the 19 hedge fund sub-sectors tracked, 13 posted trailing-twelve month inflows through November. Fixed Income funds led the way bringing in $79.1 billion, +9.8% of assets; while Sector Specific funds added $50.4 billion, +19.5% of assets; and Multi-Strategy funds saw $42.5 billion in inflows, +11.5% of assets.
Other sub-sectors with notable 12-month inflows included Event Driven funds, adding $24.6 billion 12.5% of assets; Emerging Markets – Asia funds, bringing in $20.6 billion, 14.0% of assets; Equity Long-Only funds with inflows of $16.3 billion, 8.2% of assets; and Merger Arbitrage funds taking in $11.9 billion, 14.5% of assets.
Sub-sectors with the largest 12-month outflows included Balanced (Stocks & Bonds) funds with $16.2 billion in redemptions -3.3% of assets; Macro funds shedding $12.9 billion, -6.9% of assets; Equity Long Bias funds with $8.4 billion in redemptions, -2.5% of assets; and Equity Market Neutral funds with $3.8 billion in outflows, -6.7% of assets.
Over the 12 months through November, the CTA industry added $8.9 billion in new assets. Total industry assets grew to $346.1 billion at the end of November, up from $301.5 billion a year earlier, thanks to a $25.3 billion trading profit over the period.
All four sub-sectors posted 12-month inflows through November. Systematic CTAs added $4.5 billion, 1.6% of assets; Discretionary CTAs brought in $2.7 billion, 21.9% of assets; Hybrid CTAs took in $1.8 billion, 19.4% of assets; and Multi-Advisor Futures Funds saw $871.3 million in inflows, 8.4% 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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