Several factors saw a return to inflows after a month of redemptions
The global hedge fund industry saw assets grow in October; the latest month of figures tracked by BarclayHedge.
The firm’s monthly barometer of hedge fund assets recorded net inflows of US$5.2 billion in the month, reversing the direction seen in September which posted net redemptions of $2.8 billion.
The summer months had seen three consecutive net inflows, but even then they were cautious.
The return to hedge funds reflects several factors that boosted investors’ confidence in the industry.
“The end of the shortest bear market on record, improved manufacturing data and better than expected US durable goods orders aroused investor interest,” said Sol Waksman, president of BarclayHedge.
Inflows, offset by an $11.9 billion monthly trading loss, took industry assets to near $3.41 trillion, up from $3.88 trillion in the previous month.
A study published by KPMG and the Alternative Assets Management Association earlier in the year highlighted how hedge funds have managed to survive and thrive during the early months of the pandemic.
Fixed income leads
Growth was led by fixed income funds (up $3.8 billion) with sector specific funds adding $3.5 billion according to data from 6,900 funds (excluding CTAs) that are part of the BarclayHedge database.
For the 12 months through October, the hedge fund industry experienced $118.8 billion in redemptions. A $33.9 billion trading profit during the period contributed to the total industry assets of $3.41 trillion as October ended, up from $3.13 trillion a year earlier.
