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Hedge funds experienced net outflows of $0.3bn in May, $2bn net outflows YTD

Monday, June 27, 2022
Opalesque Industry Update - The hedge fund industry experienced net outflows of $0.3bn in May, extending the negative streak to two consecutive months after the $23bn outflow in April pushed year-to-date flows into negative territory, said HFM hedge fund flows report.

Recession fears ramped up over the month as the US Federal Reserve embarks on an aggressive campaign to hike interest rates to force price increases to slow down.

The US consumer price index accelerated to 8.6% year-over-year in May, the highest level since December 1981, prompting the Federal Reserve to announce a further 75bps hike on June 15 with a potential for a further 75 or 50bps move at the next policy meeting in July.

The hedge fund industry experienced net outflows of $0.3bn in May, and $2bn in net outflows YTD, with 60% of funds having had net outflows.

The hedge fund industry had a promising start to 2022, with the Q1 2022 inflow of $21.3bn almost offsetting the $21.8bn outflow suffered in Q4 2021, but fell deeply into negative territory after experiencing $23bn of outflows in April.

Long/short equity funds suffered net outflows (-$11.1bn) for a second consecutive month as investors target diversification away from stock-based strategies. Despite high net outflows from long/short equity, 44% of funds in the strategy have had inflows this year.

Net inflows worth $16.8bn across multi-strategy, fixed income/credit and managed futures could not turn May flows positive. Multi-strategy and managed futures have been consistently recording inflows every month since the start of 2022.

Macro (-$2.4bn) and event-driven (-$3.5bn) experienced net outflows for the second and third consecutive month respectively, pushing overall asset flows in May into negative territory.

Multi-strategy attracted the largest inflows of $6.3bn, extending their streak of consecutive monthly positive flows to five months. Over the past 12 months, multi-strategy ($32bn) and managed futures ($21bn) accounted for the lion's share of inflows while L/S equity (-$55.8bn) fared the worst.

North America posted $2bn of inflows while Europe and Asia-Pacific suffered net outflows of $25.5bn and $8.5bn over the past twelve months, respectively.

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