Hedge funds posted a third consecutive month of inflows in August, adding $5.6 billion in new assets to July’s $10.5 billion in inflows and June’s $15.1 billion as the industry continued its rebound from spring’s pandemic-driven redemptions.
August’s inflows represented 0.2% of industry assets, according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions.
Coupled with a $42.6 billion trading profit in August, the month’s inflows brought total industry assets to $3.36 trillion as August ended, up from $3.26 trillion at the end of July.
Data from 6,900 funds (excluding CTAs) in the BarclayHedge database showed Fixed Income funds leading the way for August, bringing in $5.5 billion.
“While COVID-19 remained a force to be reckoned with, economies began to recover in the summer months and equity markets rebounded from their spring pandemic losses,” said Sol Waksman, president of BarclayHedge. “Investor sentiments continued to be buoyed by data that suggested the worst might be over for the economy, signs that many businesses were finding ways to adapt to the crisis and optimism about the development of a vaccine.”
Over the 12-month period through August the hedge fund industry experienced $134.1 billion in outflows. The industry posted an $85.1 billion trading profit over the period, however, bringing total industry assets to $3.36 trillion as August ended, up from $3.26 trillion at the end of July.
Five hedge fund sectors posted 12-month inflows for the period through the end of the month. Sector Specific funds led the way bringing in $23.5 billion in new assets over the period, 13.7% of assets, followed by Event Driven funds with $13.7 billion in inflows, 8.1% of assets, and Convertible Arbitrage funds adding $3.6 billion, 17.2% of assets. Balanced (Stocks & Bonds) funds brought in $2.8 billion over the 12 months, 0.9% of assets, while Emerging Markets – Latin America funds added $720.4 million, 6.4% of assets.
Hedge fund sectors with the largest 12-month redemptions included Equity Long/Short funds which shed $33.3 billion in assets over the period, 16.7% of assets, Fixed Income funds which experienced $31.3 billion in outflows, 4.9% of assets, Equity Long Bias funds which saw $23.9 billion in 12-month redemptions, 7.1% of assets, and Macro Funds which shed $18.6 billion, 9.5% of assets.
Managed futures funds posted a second straight month of inflows in August bringing in $4.9 billion in new assets. Three of the four CTA sectors tracked experienced inflows in August. After a $137.2 million trading loss for the month, total industry assets stood at $304.9 billion as August ended, up from $296.7 billion at the end of July.
For the 12-month period through August, CTAs experienced redemptions of $3.8 billion, 1.3% of assets. A $13.6 billion trading loss over the period contributed to the industry’s $304.9 billion total asset figure.
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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.
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