Hedge fund industry flows reversed course in September as the industry’s $2.8 billion in redemptions ended a three-month inflow trend. The industry had brought in $5.6 billion in new assets in August.
September’s outflows represented 0.1% of industry assets, according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions.
With the addition of a $15.6 billion trading loss in September, total hedge fund industry assets stood at more than $3.38 trillion as the month ended, up from $3.36 trillion at the end of August.
Data from 6,900 funds (excluding CTAs) in the BarclayHedge database showed Sector Specific funds leading the way in September, bringing in $2.3 billion, while Emerging Markets – Global funds added $1.6 billion.
“COVID-19 case numbers spiked in many regions and countries over the summer, while week after week brought reports of more than a million U.S. workers filing first-time unemployment claims,” said Sol Waksman, president of BarclayHedge. “Couple that with a Fed warning that the surging pandemic was beginning to hurt economic recovery and other indicators like a downward revision in oil demand forecasts and many hedge fund investors decided to look elsewhere in September.”
Over the 12-month period through September, the hedge fund industry experienced $122.2 billion in redemptions. A $60.4 billion trading profit over the period contributed to the total industry assets of more than $3.38 trillion at the end of the month, up from $3.05 trillion a year earlier.
Six hedge fund sectors posted 12-month inflows through September. Sector Specific funds led the way with $25.8 billion in 12-month inflows, 15.1% of assets, followed by Event Driven funds with $9.0 billion, 5.3% of assets, Convertible Arbitrage funds with $3.7 billion, 17.9% of assets, Balanced (Stocks & Bonds) funds with $3.1 billion, 1.0% of assets, and Emerging Markets – Latin America funds with $736.1 million, 6.5% of assets. New to the group in September was Emerging Markets – Asia funds, adding $461.8 million, 0.4% of assets.
Hedge fund sectors with the largest 12-month redemptions included Fixed Income funds shedding $34.7 billion, 5.4% of assets, Equity Long/Short funds with $31.0 billion in redemptions, 15.8% of assets, Equity Long Bias funds experiencing $19.3 billion in outflows, 5.7% of assets, and Macro funds shedding $18.0 billion, 9.2% of assets.
Managed futures funds saw a third consecutive month of industry inflows in September, bringing in $1.0 billion in new assets with two of four sectors tracked – Systematic CTAs ($918.0 million, 0.3% of assets) and Discretionary CTAs ($124.7 million, 1.1% of assets) – adding to assets for the month. The industry experienced a $3.0 billion trading loss for the month, taking total industry assets to $303.6 billion as September ended, down from $304.9 billion in August.
For the 12-months through September, CTAs experienced $5.4 billion in redemptions, 1.7% of assets. A $16.0 billion trading loss over the period contributed to the $303.6 billion industry asset total at the end of September, down from $308.4 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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