The hedge fund industry continued adding to assets in July with $18.3 billion in inflows. July’s inflows represented 0.4% of industry assets, according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions. August marked the industry’s fifth consecutive month of inflows, coming on the heels of $16.6 billion in June, $36 billion in May, $23.3 billion in April and $19.1 billion in March.
A $7.3 billion trading profit for the month brought total hedge funds assets to more than $4.40 trillion as July ended.
“Investors have been in a ‘risk-on’ mode for most of the last twelve months and July was no exception,” reflected Ben Crawford, Head of Research at BarclayHedge. “There was no shortage of promising auguries in July-- strong economic signals from the U.S., China and Europe, surging equity markets, increasing business activity and plummeting jobless figures all contributed to investors’ enthusiasm for hedge fund opportunities.”
Most hedge fund sub-sectors experienced inflows in July. Sector Specific funds benefited the most with a pickup of $4.7 billion (+1.4% of assets) followed by Balanced (Stocks & Bonds) funds $3.3 billion (+0.5% of assets), Fixed Income funds $2.4 billion (+0.3% of assets), Equity Long-Only funds $2.3 billion (+0.9% of assets) and Multi-Strategy funds $2.3 billion (+0.5% of assets).
Sub-sectors shedding assets were in the minority in July and included Equity Long Bias funds -1.0 billion (-0.3% of assets), Equity Market Neutral funds -$581.1 million (-1.1% of assets) and Event Driven funds -$246.0 million (-0.1% of assets).
The managed futures industry moved back into inflow territory in July, hauling in $920.9 million in new assets. The four CTA sub-sectors tracked all added to assets during the month: Systematic CTAs attracted the lion’s share at $748.1 million (+0.2% of assets). Multi Advisor Futures Funds added $166.9 million (+1.3% of assets), Discretionary CTAs took in $87.6 million (0.6% of assets) and Hybrid CTAs saw $85.2 million (+0.5% of assets).
12-Month Flow Trends
For the 12 months through July the hedge fund industry experienced $156.6 billion in inflows. A $407.4 billion trading profit over the period brought total industry assets to the $4.40 trillion figure as July ended, up from $4.32 trillion at the end of June and up from $3.26 trillion a year earlier.
The number of hedge fund sub-sectors posting 12-month inflows grew to 12 in July. Fixed Income funds were the leader adding $73.7 billion, a 10.0% increase in sector assets. Sector Specific funds brought in $56.8 billion (+26.6% of assets), and Emerging Markets – Asia funds saw $27.0 billion (+22.5% of assets).
Others adding to assets over the period included Multi-Strategy funds with $20.2 billion (+6.0% of assets), Event Driven funds $18.5 billion (+10.5% of assets), and Equity Long-Only funds $10.9 billion (+7.9% of assets).
Balanced (Stocks & Bonds) funds posted the largest 12-month redemptions through July, shedding -$35.2 billion (-7.8% of assets). Other sectors which saw outflows were Equity Long Bias funds -$15.6 billion (-4.8% of assets), Macro funds -$13.8 billion (-7.7% of assets), Equity Market Neutral funds -$7.0 billion (-11.0% of assets), and Equity Long/Short funds -$6.3 billion in outflows (-3.7% of assets).
Over the 12 months through July the managed futures industry posted $14.8 billion in inflows. A $19.8 billion trading profit over the period brought total industry assets to $338.6 billion, up from $296.7 billion a year earlier.
All four CTA sub-sectors posted 12-month inflows as well. Systematic CTAs were the 12-month leader adding $10.4 billion (+3.7% of assets). Discretionary CTAs brought in $2.7 billion (+24.2% of assets), Hybrid CTAs added $1.7 billion (+20.2% of assets), and Multi Advisor Futures Funds picked up $127.4 million (+1.2% of assets).
About Backstop Solutions
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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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