Asset flows: Event-driven funds prosper

By Amal Robleh

Tue Feb 4, 2014

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Equities and distressed funds suffer outflows.


December was a poor month for inflows into the hedge fund industry, with only 35% of strategies tracked experiencing positive inflows.

Event-driven funds were the biggest winners of the month, with net inflows of 1.72% following four straight months of positive performance. This combined with an asset-weighted performance gain of 2.62%, resulted in total assets for the strategy climbing 4.34%.

There were outflows from equities and distressed funds. Given the positive performance of these strategies in 2013, the outflows were likely a result of investors re-balancing their portfolios at the end of the year. U.S. equity funds had net outflows of 2.25% in December, with a performance gain of 1.46% minimizing the total loss to 0.79%.

Asset-weighted performance gains of 1.08% for commodities funds were not enough to stem the tide as investors pulled a staggering 9.48% from the strategy in a single month. This led to total assets falling by 8.39%.

A full chart of fund flows is provided below. Monthly asset flow analyses are based on self-reported monthly asset and performance figures from Americas-based hedge funds listing in the HedgeFund Intelligence database. Funds reporting their monthly assets in both the current (December) and previous (November) month managed a total of $427 billion.

Change in assets (December 2013)

Strategy

Fund Flows

Performance

Total

Commodities

-9.48%

1.08%

-8.39%

Convertible & Equity Arbitrage

-1.54%

0.83%

-0.71%

Credit

0.61%

0.66%

1.28%

Distressed

-2.27%

1.76%

-0.51%

Event Driven

1.72%

2.62%

4.34%

Fixed Income

-0.54%

0.56%

0.02%

Global Equity

-2.03%

2.77%

0.74%

Latin American Equity

-1.42%

-1.35%

-2.77%

Macro

-0.60%

-0.26%

-0.86%

Managed Futures

2.33%

0.68%

3.01%

Mixed Arbitrage

2.93%

1.14%

4.07%

Mortgage Backed Securities

0.12%

0.39%

0.51%
Multistrategy -3.36% 1.33%

-2.03%

U.S. Equity

-2.25%

1.46%

-0.79%

Other*

-4.06%

0.32%

-3.74%

Total

-0.98%

0.72%

-0.26%

*The category 'Other" refers to those funds managing strategies are not well represented enough in the database, such as Emerging Market Debt, Emerging Market Equity and Volatility, to justify discrete categorization.

Note: Strategy performance in this table is based on asset-weighted returns for funds reporting monthly assets and will therefore differ from the strategy performance of the Absolute Return Indices, which present the median return for all hedge funds within each strategy that report performance (and not necessarily assets) to the database.