FAIRFIELD, Iowa, October 16, 2018 — Hedge funds enjoyed their strongest demand in nine months in August as investors brushed off a global equities selloff, according to the Barclay Fund Flow Indicator.
Data drawn from more than 5,000 hedge funds in the BarclayHedge database estimated that the hedge fund industry (excluding CTAs) hauled in $21.5 billion (0.7% of assets) in August, reversing redemptions of $1.0 billion (-0.03% of assets) in July.
Industry assets rose to an all-time high of $3.07 trillion for the month. Investors bought hedge funds in August despite declines in global equities markets and continuing trade disputes, according to the Barclay Fund Flow Indicator, a monthly big-picture report on the health of the alternative investments industry.
“Heavy buying of hedge funds in August accompanied encouraging fundamentals in the U.S., where economic growth kept marching upward,” said Sol Waksman, founder and president of BarclayHedge. “The picture was less positive worldwide, however, as equity indexes sold off in Europe, Asia and the Emerging Markets in August amid trade anxieties and worrisome developments in Turkey’s currency and Italy’s government debt.”
Waksman noted that strong August inflows marked a significant departure from the first seven months of 2018, when hedge fund inflows averaged $2.9 billion (0.1% of assets).
At the sector level, fixed-income hedge funds saw the biggest inflows in the trailing 12-months ending in August, adding $38.3 billion (7.8% of assets). Equity Market Neutral funds attracted the strongest 12-month inflows as a percentage of assets ($15.9 billion, 20.2% of assets).
At the regional level, hedge funds based in the U.S., the U.K., and their respective offshore islands saw the strongest inflows in August. Investors plowed $28.8 billion (1.8% of assets) into U.S. funds and $3.8 billion (0.6% of assets) into U.K. funds.
“Otherwise, regional hedge fund demand reflected the global equities selloff in August,” Waksman said. Continental Europe funds had the biggest August outflows at $3.2 billion (-0.4% of assets), while China/Hong Kong funds shed $290 million (-0.5% of assets) and Latin America funds redeemed $270 million (-1.7% of assets).
In the managed futures sector, outflows from Commodity Trading Advisor (CTA) funds fell to $150 million (0.04% of assets) in August, improving on July’s losses, which hit a 19-month high of $2.4 billion (-0.6% of assets).
“CTA redemptions slowed substantially in August as oil prices rebounded and the U.S. dollar rally leveled off,” Waksman said. CTA assets dipped 0.4% to $356.0 billion in August, a fresh year-to-date low.
The Barclay Fund Flow Indicator is published monthly, with comprehensive results available here.
About BarclayHedge
Sol Waksman is an experienced media source, providing perspectives on hedge fund and managed futures trends. For more commentary or background, call 641-472-3456 or email swaksman@barclayhedge.com.
BarclayHedge is the global leader in providing independent, research-based information services to the alternative investment industry. Founded in 1985, Barclay currently maintains data on more than 6,900 hedge funds, funds of funds, and CTAs. No one has been in the business of collecting alternative investment data longer than BarclayHedge.
Institutional investors, brokerage firms, and private banks worldwide utilize BarclayHedge indices as performance benchmarks for the hedge fund and managed futures industries.
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