Investors “more selective” with hedge fund allocations

Hedge fund investors are more selective with their allocations after a period of poor returns, but there is no general disdain for the sector that has seen high outflows, researchers claim.

Investors redeemed just under $1.9 billion (€1.7 billion) from hedge funds in April and total assets remain just below the milestone $3 trillion figure, at $2.986 trillion.

An eVestment report states that current negative investor sentiment appears driven by performance, not by a general disdain for the industry, which has seen a number of institutions exit from hedge funds including the New York City Employees’ Retirement System.

Poor performance saw $1.1 billion in redemptions from multi-asset funds in April, eVestment says.

Yet investor interest in commodity hedge funds rose, with $1 billion of allocations. Managed future funds were also sought after in April, the strategy’s third consecutive positive month with inflows of $2.9 billion.

Additionally, macro strategies enjoyed inflows of $2.7 billion, stopping a five-month string of redemptions.

Despite disappointment with performance, positive hedge fund returns in fact helped boost the industry’s assets by $6.86 billion in April.

Hedge funds operating out of Europe were receiving assets at a greater pace than other locations, especially Asia which saw redemptions of $1.38 billion last month, the eVestment report showed.

©2016 funds europe