Hedge funds experienced a second straight month of inflows in July, bringing in $10.5 billion as the industry continued to shake off spring’s pandemic-driven redemption trend. July’s new assets built on June’s $15.1 billion in inflows.
July’s inflows represented 0.3% of industry assets, according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions.
With a $32.1 billion trading profit in July, total hedge funds industry assets stood at nearly $3.26 trillion as July ended, up from $3.11 trillion a month earlier.
Data from 6,900 funds (excluding CTAs) in the BarclayHedge database showed Balanced (Stocks & Bonds) funds leading the way in bringing in new assets, adding $6.7 billion in July.
“Investors clearly took comfort in the rebound in equity markets as the spring months progressed,” said Sol Waksman, president of BarclayHedge. “Meanwhile, the pace of economic recovery in regions that were first to suffer the impacts of the COVID-19 pandemic was reflected in regional fund inflows.”
Over the 12-month period through July the hedge fund industry experienced $150.9 billion in redemptions. The industry posted a $32.1 billion trading profit through July, which, along with June and July inflows, brought total industry assets to nearly $3.26 trillion, an increase from $3.11 trillion at the end of June and up from $3.12 trillion a year earlier.
There was a new addition to the fund sectors posting 12-month inflows in July with Balanced (Stocks & Bonds) funds joining the mix. Sector Specific funds led the way adding $20.5 billion over the period, 11.8% of assets, Event Driven funds brought in $18.1 billion, 10.8% of assets, Balanced (Stocks & Bonds) saw inflows of $5.4 billion, 1.6% of assets, Convertible Arbitrage funds added $3.6 billion, 17.6% of assets, and Emerging Markets – Latin America funds brought in $653.6 million, 4.9% of assets.
Hedge fund sectors with the largest 12-month redemptions included Fixed Income funds with $45.0 billion in redemptions, 7.0% of assets, Equity Long/Short funds shedding $35.4 billion, 17.5% of assets, and Equity Long Bias funds experiencing $24.1 billion in outflows, 7.1% of assets.
Managed futures funds returned to inflows in July adding $7.2 billion with all four CTA sectors tracked experiencing net inflows for the month. A $3.7 billion trading profit in July brought total industry assets to $296.7 billion as the month ended, up from $283.1 billion at the end of June.
CTA funds in the U.S. and the U.K. played the lead roles in the managed futures industry’s July inflow performance with U.S. funds adding nearly $3.7 billion during the month, 2.1% of assets, while funds in the U.K. and its offshore islands brought in $3.3 billion, 5.2% of assets.
On the redemption side of the ledger, managed futures funds in Continental Europe experienced $102.0 million in redemptions, 0.3% of assets, and CTAs in Asia excluding China and Japan shed $15.4 million, 0.2% of assets.
For the 12 months through July, the managed futures industry experienced redemptions of $13.8 billion, 4.2% of industry assets. A $14.4 billion trading loss over the period contributed to the industry’s $283.1 billion total asset figure as July ended, down from $327.3 billion a year earlier.
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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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