Allocations continue to trickle into hedge funds
23 September 2018 London
Image: Shutterstock
The hedge fund industry had its second consecutive month of inflows in the second half of 2018 in August, and this time the breadth of allocations was much improved, according to eVestment’s hedge fund industry asset flow report for August.
Despite the improvement, it has by no means been a universally beneficial period, said eVestment. Investors have shown a willingness to stick with themes, both positive and negative, but also to change direction quite quickly.
How the rest of the year will play out given some recent macro performance slips, and these investor tendencies, is a difficult guess, it commented.
Looking at the underlying figures, investors added an estimated US$4.74 billion into hedge funds in August bringing the year-to-date (YTD) net flows for the industry to $15.38 billion.
Total estimated hedge fund assets are now $3.308 trillion, eVestment calculated.
In four of the five months since February, prior to August, a well below average proportion of products were receiving new allocations, added eVestment, somewhat of a concern for the health of the industry.
Investors have resumed allocating to macro strategies despite performance difficulties.
Macro funds produced three consecutive months of asset-weighted performance declines ending in April. Three months later they had their second monthly outflow of 2018.
In July, funds produced losses again, and in August asset-weighted losses rose meaningfully.
Despite the earlier losses, and in the face of current losses, macro strategies resumed their asset-raising success.
Managed futures funds faced a sixth consecutive month of redemption pressures in a year that has been a tough one for managed futures products, said eVestment.
One positive note it identified is that asset-weighted returns in August were their highest since January.
If only the losses experienced in managed futures in February could have been avoided, an argument in their favour would be much easier to make to would-be investors, commented eVestment.
Despite the improvement, it has by no means been a universally beneficial period, said eVestment. Investors have shown a willingness to stick with themes, both positive and negative, but also to change direction quite quickly.
How the rest of the year will play out given some recent macro performance slips, and these investor tendencies, is a difficult guess, it commented.
Looking at the underlying figures, investors added an estimated US$4.74 billion into hedge funds in August bringing the year-to-date (YTD) net flows for the industry to $15.38 billion.
Total estimated hedge fund assets are now $3.308 trillion, eVestment calculated.
In four of the five months since February, prior to August, a well below average proportion of products were receiving new allocations, added eVestment, somewhat of a concern for the health of the industry.
Investors have resumed allocating to macro strategies despite performance difficulties.
Macro funds produced three consecutive months of asset-weighted performance declines ending in April. Three months later they had their second monthly outflow of 2018.
In July, funds produced losses again, and in August asset-weighted losses rose meaningfully.
Despite the earlier losses, and in the face of current losses, macro strategies resumed their asset-raising success.
Managed futures funds faced a sixth consecutive month of redemption pressures in a year that has been a tough one for managed futures products, said eVestment.
One positive note it identified is that asset-weighted returns in August were their highest since January.
If only the losses experienced in managed futures in February could have been avoided, an argument in their favour would be much easier to make to would-be investors, commented eVestment.
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