Hedge funds largely protected investors from the equity market turmoil in August, posting flat returns of 0.02% during a volatile month that saw the S&P 500 decline 4.2%. Despite the relative outperformance, hedge fund industry AuM declined for the fifth consecutive month in August, falling $18.5bn, which extended the YTD decline to $146bn. North America accounted for the lion’s share of AuM decline as the region recorded net outflows of $10.1bn, driven by rising risk-off sentiment as inflation has remained rapid at 8.3% in August despite the Federal Reserve’s aggressive tightening. By strategy, long/short equity hedge funds posted the largest AuM decline of $11.8bn, resuming their trend of AuM decline that has persisted since the start of 2022 after a short-lived $0.9bn rebound in July.
Asset flows data since January 2021
Key highlights for August 2022:
- Hedge fund industry AuM declined for the fifth consecutive month in August, falling
$18.5bn.
- The industry recorded $8.0bn of performance-based losses and $10.5bn of net outflows.
- By strategy, fixed income ($1.4bn) posted the largest inflows in August, breaking a 10-month streak of outflows.
- CTA/managed futures funds suffered their second consecutive month of net outflows
($6.4bn).
- Hedge funds have experienced $101bn in net outflows YTD, with 68% of funds having net outflows.
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