A recent report from Nasdaq’s eVestment showed that net investment flows into hedge funds were negative $11.66 billion in August. This is his third consecutive month of negative net money flows for the hedge fund industry. Across the industry, hedge funds have redeemed $44.93 billion this year, echoing recent patterns. Average annual outflows for 2016, 2018, 2019 and 2020 were $77 billion, with 2022 on track for those years. Historically, the second half of the year has tended to be negative for hedge fund flows, with December having the highest number of redemptions in most calendar years.
Equity long/short, credit, and macro-based hedge fund strategies have been under redemption pressure this year and continued to do so in August. Macro-based strategies posted the biggest outflows for the month, with $3.68 billion of investor capital outflows, followed by long/short equity funds with $3.03 billion in outflows.
Redemption rates are particularly high for long/short equity funds. So far this year, the long/short hedge fund has lost his $25.06 billion in redemptions. More than 60% of his funds in this strategic segment have lost assets this year, according to eVestment data. The Directional Credit Fund ranked him second with $21.23 billion in redemptions.
The managed future fund, the best performing hedge fund strategy in 2022 with a year-to-date return of 9.97%, also saw negative investment flows in August as the strategy underperformed in recent months. I was.
The only category that saw net inflows during the month was multi-strategy funds. The data shows that investors this year lack confidence in a single hedge fund strategy, preferring access to a diverse array of strategies in a single allocation.
Despite the trend of outflows in recent years, the hedge fund sector still holds $3.49 trillion in assets after a strong performance.—The average annual return for 2019, 2020 and 2021 is 9.29%.
Tags: eVestment, Flow of Funds, Hedge Funds