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Bailey McCann, Opalesque New York:

According to new data from asset servicer Citco, hedge funds saw an overall weighted average return of 2.77% in Q2, taking YTD average weighted returns to 8.04%. Hedge funds have now had three consecutive quarters of gains, going back to Q4 2022, Citco data shows. Almost 70% of all funds delivered positive performance in the latest three-month period.

Equities and multi-strategy funds were the best performers in the second quarter, with weighted average returns of 4.52% and 2.54% respectively, taking their YTD returns to 10.34% and 10.14%.

Not all funds rose, however, with commodities and global macro funds seeing negative returns of -2.02% and -2.15% to take their YTD returns to -4.3% and -4.08% respectively.

Funds with between $1-3B of assets were the top performers in Q2, with a weighted average return of 3.3%, followed by the $200M-$500M category at 3.08%. The gains over the most recent quarter meant the largest funds with more than $3B of assets had a YTD return of 10.63%, with the other categories all up as well, although by smaller amounts.

Investors are still willing to redeem despite positive performance. Citco data shows that redemptions increased in the second quarter, driven by a spike in June as positive performance prompted investors to take profits and rebalance their exposures.

Capital flows were negative in Q2, with net redemptions of $7B. Much of this was focused on equities funds that saw net outflo......................

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