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A -$173.10 billion trading loss in June brought total hedge fund industry assets to $4.87 trillion as the month ended.

"Inflation- and recession-wary investors continued and intensified the trend of capital redemption from Hedge Funds in June. It marks five consecutive months of net outflow activity from the industry which has lost capital in 6 of the last 7 months," noted Ben Crawford, Head of Research at BarclayHedge. "It has made a now-undeniable dent in the industry's recent all-time AUM record, which peaked in March 2022 at nearly $5.11 trillion USD."

All but a handful of hedge fund subsectors experienced net redemptions in June. Those that saw inflows included Merger Arbitrage funds, bringing in $1.35 billion in assets, Equity Market Neutral funds, adding $1.00 billion, and Emerging Markets - Latin America funds, with $122.23 million in inflows.

Again in June, Fixed Income funds saw the largest outflows with -$17.57 billion. Equity Long Bias funds shed -$5.27 billion, Balanced (Stocks & Bonds) funds saw -$5.00 billion in redemptions, Sector Specific funds saw -$2.83 billion exit, and Emerging Markets - Asia funds experienced -$2.60 billion in redemptions.

After four consecutive months of inflows, the managed futures industry also experienced net redemptions in June with -$2.19 billion in outflows in June. While three of four CTA subsectors tracked saw net inflows in June, Systematic CTAs (by far the largest CTA subsector) tipped the overall figure to net industry outflows with -$3.88 billion in redemptions.

"While CTAs and Managed Futures appear to have suffered a similar recall of investor capital as Hedge Funds, the story in those markets is less clear cut. Discretionary, Hybrid and Multi-Advisor subsectors all absorbed more subscriptions than they shed redemptions in June with Discretionary shops, in particular, swelling their assets by 6.69%," observed Crawford. "The much larger Systematic CTA subsector saw its assets trimmed by a modest -1.12%, but the haircut was large enough in monetary terms to overwhelm healthy gains in the other subsectors."

Discretionary CTAs enjoyed a large influx of investor favor with $1.47 billion in net inflows for a growth in assets of +6.69%. CTA Multi Advisor Futures Funds added $311.27 million (+1.70% of assets), and Hybrid funds saw $222.75 million in inflows, (+ 0.95% of assets).

12-Month Flow Trends

For the 12 months through June, the hedge fund industry experienced -$35.03 billion in redemptions. A -$448.00 billion trading loss over the period brought industry net assets to the $4.87 trillion figure at the end of June, down from $5.07 trillion at the end of May but up from $4.40 trillion a year earlier.

In dollar terms, Multi-Strategy funds continued to set the pace for trailing twelve-month net inflows, adding +$39.42 billion (+8.84% of assets). Other subsectors enjoying net inflows over the prior twelve months included Sector Specific funds bringing in +$14.42 billion (+4.16% of assets); Merger Arbitrage funds with +$12.51 billion (+14.15% of assets); Convertible Arbitrage funds adding +$5.41 billion (+17.38% of assets); and Option Strategies funds with +$3.05 billion (+6.72% of assets).

Hedge fund subsectors with the largest 12-month redemptions through June included Fixed Income funds with -$49.30 billion (-5.32% of assets); Emerging Markets - Global funds shedding -$18.08 billion (-8.97% of assets); Macro Funds down -$12.58 billion (-6.04% of assets); Equity Long Bias funds slipping -$10.98 billion (-3.05% of assets); and Emerging Markets - Asia funds with -$10.28 billion (-5.42% of assets).

Over the 12 months through June, the managed futures industry saw $4.93 billion in inflows. A $50.92 billion trading profit over the period brought total industry assets to the $387.75 billion figure, up from $338.59 billion a year earlier.

CTAs saw the same split between inflows and redemptions over the 12-month period as the industry experienced in June, with three of four subsectors recording inflows. Discretionary CTAs have been the largest beneficiaries of this trend, having sucked up an additional $5.09 billion over the period for an increase of +33.17% of its AUM. Multi Advisor Futures Funds have also scooped up a non-trivial $2.73 billion for an increase of 21.90% of assets. Thirdly, Hybrid CTAs saw net inflows totaling $1.32 billion (+7.35% of assets) over the trailing twelve-month period.

Moving in the opposite direction, Systematic CTAs were down -$1.54 billion in net redemptions over the period (-0.49% of assets).

Despite net outflows in June, robust performance, retained earnings and new fund starts have driven the CTA industry to new all-time AUM records in each of the last three months, including June.

Press release
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