Hedge fund investors held their ground in March 2018, according to the Barclay Fund Flow Indicator, even as the equity market correction entered its second month. Industry assets climbed to an all-time high of USD3.0 trillion.
Data drawn from more than 5,000 hedge funds in the BarclayHedge database estimated that the hedge fund industry, exclusive of CTAs, added USD6.1 billion (0.2 per cent of assets) in March, down 64.0 per cent from February. Hedge funds have added assets in 10 of the past 12 months, according to the Barclay Fund Flow Indicator, a monthly big-picture report on the health of the alternative investments industry.
“The long-running US bull market in equities and the more recent upturns in economies worldwide have put hedge fund assets on a tear for the past half-decade,” says Sol Waksman (pictured), founder and president of BarclayHedge. “Assets have surged 22.1 per cent in the past 12 months, 28.9 per cent in the past two years, and 42.6 per cent since March 2013.”
Fixed Income hedge funds enjoyed the heaviest inflows in the trailing 12 months ending in March (USD33.6 billion, 7.3 per cent of assets), the Barclay report estimated. Macro funds suffered the heaviest outflows in the same time span (-USD16.9 billion, -7.7 per cent of assets).
At the regional level, funds focusing on the UK and Europe had the highest inflows (USD9.2 billion, 1.5 per cent of assets; and USD2.6 billion, 0.3 per cent of assets, respectively) in March. US-focused funds endured the biggest outflows (-USD6.3 billion, -0.4 per cent of assets).
“Jitters over trade policy and potential tariffs coming out of Washington DC, appear to have lured hedge fund investors to relative stability across the Atlantic,” Waksman says.
In March, commodity trader adviser (CTA) funds suffered outflows for the first time in more than a year (-USD278.6 million, -0.1 per cent of assets), according to the Fund Flow Indicator. Industry assets totalled USD367.3 billion in March.
“In spite of the small setback in March, CTA assets grew 4.6 per cent over the trailing 12 months,” Waksman says. “The global rebound in commodities prices has pushed CTA assets up 11.9 per cent from their interim low of USD328.2 billion in October 2014.”
