Investors Removed $1.9 Billion from Hedge Funds in April; Commodity Strategies Have Strong Showing

While investors redeemed just under $1.9 billion from hedge funds in April, performance gains helped boost assets by $6.86 billion, bringing total hedge fund industry assets to $2.986 trillion, according to eVestment’s just-released April Hedge Fund Asset Flows Report.

According to report author Peter Laurelli, eVestment vice president and global head of research, negative investor sentiment seems aimed primarily at funds that underperformed in 2015. In spite of several high-profile announcements about institutional investors getting out of hedge funds, investors continue to allocate money to funds that performed well in 2015 while pulling money from funds that performed poorly last year.

Some other interesting points from the current report include:

· Interest in commodity funds was positive again in April. Investors added $1.0 billion during the month, and a total of $6.4 billion in the current 11-month wave of positive investor sentiment for this universe.

· Managed futures funds received $2.9 billion in April, the third consecutive positive month. In this universe, performance has had less of an impact than size. In 2016, $6.2 billion has been added to large funds that were negative in 2015 and $7.5 billion added to large funds that were positive.

· In April, macro strategies received a net $2.7 billion, stopping a five-month string of redemptions.

· Funds operating out of Europe have been receiving assets at a greater pace than the other major domiciles in 2016. Interest is primarily focused on large funds, but allocations have been into a diverse set of exposures. Products targeting European equity markets have seen interest from investors, as well as many of the major managed futures funds in the region.

· On the other hand, flows out of funds located in Asia jumped in March and were negative again in April. Investors withdrew a net of $1.38 billion from Asia-domiciled funds in April, bringing YTD redemptions to $3.8 billion.

· Multi-strategy fund flows were negative in April: the group lost $1.1 billion due to redemptions. April was the second month of outflows in 2016 and follows a string of performance losses.

To download a full copy of the report, please click here.