Hedge funds maintained their positive momentum in July, with two-thirds of strategies posting gains, according to hedge fund administrator Citco’s July 2024 report.
There was an uptick in performance across the majority of strategy types when compared to June – with the exception of commodities and equities. The overall weighted average return for Citco-administered funds increased to 0.6%, up from 0.4% in June, marking a consecutive monthly rise.
Top-performing strategies included fixed income arbitrage and multi-strategy, which posted returns of 1.4% and 1.0%, respectively. Global macro followed closely with a 0.9% return. However, equity strategies, which had delivered a strong 1.5% return in June, saw a decline to just 0.1% in July. Commodities and event-driven funds also faced challenges, recording negative returns of -1.8% and -0.4%.
On the assets under administration (AuA) front, all categories reported positive returns in July. Funds with AuA between $1 billion and $3 billion led with a 1.1% return, followed by those in the $200 million to $500 million range, which returned 0.8%. The largest funds, with over $3 billion in AuA, still managed a 0.5% return despite a slight dip, while funds in the $500 million to $1 billion range edged back into positive territory with a 0.1% gain.
Brighter hedge fund days ahead
Overall, 64.1% of funds achieved positive performance in July, a notable improvement from the 55% recorded in June. Additionally, the return spread between the top and bottom-performing funds continued to widen, indicating growing disparities in performance across the sector.
The report also highlighted a return to net inflows in July, with hedge funds seeing $3.3 billion in net inflows, the second-highest level this year. Multi-Strategy funds were the primary contributors, with $2.3 billion in net inflows, reversing much of the previous month’s outflows. Equity funds also saw positive net inflows of $0.8 billion, while other strategies, including global macro, arbitrage and event-driven funds, posted smaller gains.
On a regional basis, funds in the Americas and Europe both recorded net inflows of $1.9 billion and $1.6 billion, respectively, while Asia saw net outflows of $0.2 billion.
