Hedge funds reversed course in June from the pandemic-driven redemption trend of prior months, posting $15.1 billion in inflows. It was a significant turnaround from $8.0 billion in outflows in May, $38.1 billion in April and $85.6 billion in redemptions in March.
July’s inflows represented 0.5% of industry assets, according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions.
The hedge fund industry turned in another profitable trading month as well, earning a $34.7 billion trading profit and bringing total industry assets to more than $3.11 trillion as the month ended.
Data from 7,000 funds (excluding CTAs) in the BarclayHedge database showed Balanced (Stocks & Bonds) funds leading the way in bringing in new assets in June with $13.8 billion in inflows.
“As the spring months progressed, there was a growing sense of investor optimism that the worst of the pandemic’s economic damage was behind us,” said Sol Waksman, president of BarclayHedge. “As unemployed figures declined and stock markets recovered, investors began coming back to hedge funds.”
Over the 12-month period through June, hedge funds experienced $169.5 billion in redemptions. Coupled with June’s inflows, a $34.7 billion trading profit during the month brought industry assets to more than $3.11 trillion as June ended, up from $3.04 trillion at the end of May but down from $3.15 trillion a year earlier.
Hedge funds posting 12-month inflows through June were led by Event Driven funds which brought in $21.0 billion over the period, 12.8% of assets. Sector Specific funds added $15.1 billion, 8.7% of assets, Convertible Arbitrage funds took in $3.2 billion, 15.7% of assets, and Emerging Markets – Latin America funds added $1.0 billion, 8.1% of assets.
Sectors with the largest 12-month redemptions included Fixed Income funds with $46.7 billion in outflows, 7.0% of assets, Equity Long/Short funds with $41.3 billion in redemptions, 20.1% of assets, and Equity Long Bias funds which shed $19.6 billion, 5.9% of assets.
The managed futures industry reversed course from May’s $1.3 billion in inflows with $440.2 million in redemptions in June. A $1.4 billion trading loss brought industry assets to $283.1 billion as the month ended, down from $284.1 billion at the end of May.
For the 12 months through June, the managed futures industry experienced $23.6 billion in redemptions, 7.3% of industry assets. A $10.4 billion trading loss over the period contributed to the industry’s $283.1 billion total asset figure at the end of June, down from $324.8 billion a year earlier.
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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.
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