Bailey McCann, Opalesque New York:
The latest asset flow data from eVestment shows that hedge funds saw their fourth consecutive month of positive inflows. Inflows added approximately $9.3bn. October's performance gains increased AUM by an additional 1.74%, making it the industry's largest since December 2010. With $2.802tn in AUM, the hedge fund industry is nearing its all-time pre-financial crisis peak.
In terms of strategies, equity hedge fund flows outpaced credit strategies for only the second month in 2013. Allocations of $18.4bn in the last four months have pushed YTD flows positive, the group has not had a year of positive flows since 2010. Credit fund flows were positive for the 12th consecutive month, but at their second lowest level of the year. Investor interest in MBS strategies appears negative as the group weighed on overall credit fund flows in October. Managed Futures saw another month of redemptions, their 15th of the last 18 months.
October marked emerging market hedge funds’ first three-month string of inflows, a feat not seen since early 2010. Investor interest in European market exposure has been on a rise of late with $2.9bn added in October and $7.3 billion in the last three months. A significant number of emerging markets are slated for major elections in 2014, and these markets are expected to account for nearly half of global growth over the same period based on IMF data.
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