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The net flow of assets across the hedge fund industry in May does not highlight what remains a volatile period for industry flows. In March and April, the volume of asset movement was high mainly because there were some significant redemptions.

In the full year periods of 2018 and 2019, the volumes of asset movement were lower, but the problem then was outflows were not being offset by meaningful new allocations. That the data in May shows flows were near flat and the volume of asset movement was high is a sign that new allocations are being made while redemptions persist.

Investor flows were near flat in May, with net inflows of an estimated $1.71 billion into hedge funds. Total estimated industry assets rose again due to performance gains as AUM sits near $3.05 trillion.

The volume of asset movement is the sum of the absolute value of fund-level net inflows and net outflows, divided by prior period reported assets and is useful to compare how much money is in motion month to month. The average monthly volume for 2019 was about 2.6% of reported assets.

In March 2020, the value rose to 4.9%, meaning a very large amount of money was moving in and out. That was the highest reading since at least 2015, the earliest point of tracking this statistic.

In April and May, the value was 3.4% and 3.3%, meaning compared to the last couple of years (2018's average was also around 2.6%), there remains a lot of money moving about the industry even as net flows were nearly flat during the month of May.

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