Investors pulled $11.57 billion out of hedge funds in April, marking the sector’s biggest month of fund outflows of the year, according to Nasdaq eVestment.
The exodus was concentrated in equity hedged funds, where $8.94 billion of funds were removed in April, adding to the sector’s $19.4 billion of outflows so far in 2023.
“Probably the most interesting point about this April’s aggregate flow data is that it was another month where redemptions were not concentrated among few, butrelatively spread across many,” the eVestment report said.
“To put it simply, April’s data indicated elevated and broad-based redemptions.”
The Dow Jones Industrial Average DJIA, -0.20% was lower Thursday as investors focused on U.S. debt-ceiling talks in Congress coming down the the wire on the need to raise the government’s borrowing limit, or risk completely draining its coffers, potentially as early as June 1. It was off 1.2% for the year, according to FactSet.
The S&P 500 index SPX, 0.77% has been largely stuck in a holding pattern below 4,200 for weeks, but still was up 8.2% on the year through Thursday. Optimism around AI technologies were giving a 1.8% boost to the Nasdaq Composite Index COMP, 1.60% on Thursday, with shares of Nvidia Corp. NVDA, 25.13% surging 26% Thursday. The Nasdaq was up 21.3% on the year.
Bucking the outflow trend, hedge funds focused on fixed-income and credit strategies collectively saw $1.7 billion of inflows in April, boosting their flows this year by $5 billion so far, according to eVestment.
The Federal Reserve’s rapid pace of rate hikes over roughly the past 12 months has led to tighter credit and higher bond yields TMUBMUSD10Y, 3.801%.
Hedge-fund assets under management were pegged at $3.42 trillion, according to eVestment.
On the heels of March’s dismal numbers for hedgies:
- Investors removed an estimated net $3.32 billion from hedge funds in March. Performance accounted for a decrease in assets. The result of both factors was a $17.7 billion decrease in assets to an estimated $3.409 trillion.
- March was the tenth consecutive monthly net outflow for hedge funds
Volume of Net Flows:
Source: eVestment. Monthly Absolute Net In/Outflow as a % of Prior Period Reported Assets, April 2018 – March 2023
TLDRS:
- Investors pulled $11.57 billion out of hedge funds in April, marking the sector’s biggest month of fund outflows of the year, according to Nasdaq eVestment.
- Investors removed an estimated net $3.32 billion from hedge funds in March.
- Investors removed an estimated net $4.83 billion from hedge funds in February.
- Investors removed an estimated net $4.18 billion from hedge funds in January.
- Investors removed an estimated net $111 billion from hedge funds in 2022.
- From 1/1/2022-4/30/23, Investors have removed $134.9 billion from hedge funds.
- Hedgies r fuk