Macro Hedge Fund Outflows Continue in July

Better performance has not lured investors back to macro strategies, and credit hedge funds are suffering too.

Macro and credit hedge funds are experiencing a rough ride in 2014 with investors pulling money out of the strategies in spite of positive performance.

Research by eVestment found that $2.5 billion was withdrawn from macro strategies during July, the sector’s second month of “elevated outflows”, dragging the its 2014 flows into negative territory. Macro funds suffered aggregate outflows for 2013, but have not suffered two years of outflows since “at least 2003”, eVestment’s Vice President of Research Peter Laurelli said.

The outflows come despite a period of improved performance for macro funds. According to data from Preqin, macro funds were one of the few hedge fund sectors to post positive performance in July and performance from January to July 2014 has exceeded that of the corresponding period last year.

Credit hedge funds experienced outflows of $2.4 billion in July, according to eVestment. This was despite credit strategies having ranked among the best performing hedge fund markets during the first seven months of 2014.

The redemptions meant a “muted” month for hedge fund flows overall, Laurelli said, with $4.9 billion in new money being invested during July. This compares to a 12-month inflow average of $14.9 billion.

Despite the inflows overall, assets as measured by eVestment declined by 0.49% due to negative performance, although total industry assets remain above $3 trillion. Citi Investor Services has forecast that performance and inflows will hit $5.8 trillion by 2018. evestment-july-hf-stats

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