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March trading profits and inflows propel hedge fund AuM to record high of $4.07tln

Wednesday, June 02, 2021
Opalesque Industry Update - Hedge funds saw $19.1 billion in new assets flow into the industry in March 2021. Coupled with a $28.5 billion monthly trading profit, total hedge fund industry assets rose to more than $4.07 trillion as March ended, a new record high.

Most hedge fund sectors experienced net inflows in March. Fixed Income funds set the pace adding $6.9 billion to assets, while Sector-Specific funds brought in $5.8 billion, Emerging Markets - Asia funds saw $5.6 billion in inflows, Event-Driven funds took in $3.0 billion and Multi-Strategy funds added $2.9 billion.

Notable among sectors shedding assets during the month were Emerging Markets Global funds with $3.8 billion in redemptions, Equity Long Bias funds with $3.3 billion in outflows and Macro Funds with $1.7 billion in redemptions.

"Easing of lockdown restrictions, optimistic economic forecasts, rising equity and commodity prices and President Biden's $1.9 trillion pandemic recovery plan buoyed investors' optimism," said Sol Waksman, president of BarclayHedge. "The last time that hedge funds had a losing month was October 2020 when the Barclay Hedge Fund Index declined -0.11%."

Over the 12-month period through March, the hedge fund industry experienced $41.9 billion in inflows. A $552.1 billion trading profit over the period contributed to the total industry assets of $4.07 trillion at the end of the month, up from $4.03 trillion at the end of February and up from $2.86 trillion a year earlier.

Ten hedge fund sectors experienced 12-month inflows through March led by Sector-Specific funds with $54.9 billion in inflows, 32.7% of assets. Others posting inflows over the period included Fixed Income funds adding $45.5 billion, 7.6% of assets, Emerging Markets - Asia funds bringing in $30.6 billion, 30.4% of assets, Event-Driven funds with $17.6 billion in inflows, 10.7% of assets, and Convertible Arbitrage funds adding $7.1 billion, 32.3% of assets.

Sectors with the largest 12-month redemptions included Balanced (Stocks & Bonds) funds with $44.1 billion in outflows, 12.5% of assets, Macro funds shedding $19.4 billion, 11.0% or assets, Equity Long Bias funds with $19.2 billion in redemptions, 6.4% of assets, Equity Long/Short funds with $14.9 billion in outflows, 8.4% of assets, and Equity Market Neutral funds with $9.7 billion in redemptions, 13.1% of assets.

The managed futures industry extended its inflow streak to five consecutive months bringing in $1.7 billion in new assets in March. Three of four CTA sectors experienced net inflows in March, led by Systematic CTAs which brought in $1.3 billion, 0.5% of assets. Hybrid CTAs added $447.8 million, 2.8% of assets, and Multi Advisor Futures Funds experienced $131.2 million in inflows, 1.2% of assets.

Discretionary CTAs stood alone in experiencing net redemptions in March shedding $95.7 million, 0.6% of assets.

For the 12-month period, the managed futures industry experienced $21.3 billion in inflows. A $16.1 billion trading profit over the period contributed to the $319.0 billion in total industry assets, up from $278.0 billion a year earlier.


About Backstop Solutions
Backstop develops technology to simplify and streamline otherwise time-consuming tasks and processes, enabling our clients to quickly and easily access, share and manage the knowledge that's critical to their day-to-day business success.

BarclayHedge, a division of Backstop, currently maintains data on more than 7,100 hedge funds, funds of funds, and CTAs. The BarclayHedge Indices are utilized by institutional investors, brokerage firms and private banks worldwide as performance benchmarks for the hedge fund and managed futures industries.

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