Hedge funds’ generally positive performances so far this year appears not to have calmed investors’ concerns following the industry’s performance challenges in 2018. Investors pulled $16.43 billion from the industry in June, bringing year-to-date (YTD) outflows to -$44.61 billion, according to the just-released June 2019 eVestment Hedge Fund Asset Flows report. Overall industry AUM stood at $3.273 trillion in June.
For the month of June, 57% of reporting managers had net redemptions, and the month capped off the fifth consecutive quarter of industry redemptions. However, that also means that in June 43% of managers had inflows or were flat. For hedge funds managers, this highlights the importance of having a compelling marketing and investor relations message that highlights performance, expertise and other elements that set one fund apart from another. And for investors, this highlights the importance of data and due diligence in the process of researching and selecting the right hedge funds.
Some interesting asset flows figures from the latest eVestment report include:
- Event Driven funds were the big asset winners in June, bringing in +$1.89 billion in June. YTD these funds have pulled in +$10.64 billion, making them the asset flow leaders for the year as well.
- Convertible Arbitrage funds eked out a positive month in June, pulling in +$300 million last month, with asset flows of +$940 million YTD. This would normally be unremarkable but for the sea of red among other primary strategies in June and so far this year, and for the fact that Convertible Arbitrage funds are among the smaller primary strategies, with $55.13 billion in AUM as of June.
- Asia- and Emerging Markets-focused funds were also asset winners in June, pulling in +$480 million and +$730 million respectively. Among investment regions, these funds are big asset winners for the year as well, with inflows of +$3.44 billion and +$5.46 billion YTD respectively.
- Among primary strategies, Long/Short Equity funds were the biggest asset losers in June and YTD, with -$5.71 billion being pulled from these funds in June and -$23.16 billion being pulled YTD. Long/Short Equity funds are still the largest primary hedge fund strategy, with $761.53 billion in AUM.