Hedge funds recorded their fifth month of investor redemptions pushing net investor allocations into the red for the year with US$8.7 billion outflows as of September 2016 YTD – the steepest year-to-date redemptions since 2009. Nonetheless, investors have been selective in their allocations across strategies with CTA/managed futures and multi-strategy hedge funds seeing stronger subscriptions.

Other key highlights for September 2016 include:

• The US$207.5 billion event driven hedge fund space has seen US$14.0 billion investor redemptions over the past nine months, the strategy’s steepest YTD outflows on record and up from US$1.5 billion outflows over the same period last year.
• Asset base for the US$1.49 trillion North American hedge fund industry grew by US$13.1 billion over the year with most of this growth attributed to performance-driven gains (US$18.5 billion year-to-date) while redemptions totalling US$5.5 billion were recorded over the same period.
• The US$254.6 billion CTA/managed futures hedge fund industry has seen its asset base grow by US$17.1 billion over the past nine months, with the strategy recording the highest year-to-date investor inflows (US$11.0 billion).
• The US$529.6 billion European hedge fund industry has seen its asset base contract by US$5.5 billion year-to-date, with managers seeing strong investor redemptions totalling US$17.1 billion over the past five consecutive months for the period ending September. The Eurekahedge European Hedge Fund Index was down 0.39% year-to-date.
• Within Asia Pacific, Japan dedicated strategies have been the worst performing, losing 3.00% while broad Asia ex-Japan mandates are up a modest 2.39% with strength led by underlying India focused hedge funds (+8.47% for the year). Indian hedge funds have outperformed the BSE Sensex Index which gained 6.69% over the past nine months.
• While underlying Greater China dedicated hedge funds fell 0.97% over the year, managers still beat underlying markets with the CSI 300 Index down 12.80% over the same period.
• The top performing North American hedge funds have returned 18% on average for the year, well ahead of the star performers in Asia and Europe which have gained around 8% each. Of the top 150 funds, 71% of North American managers posted double digit returns as of August 2016 year-to-date compared with 51% of managers over the same period in 2015. More details on this in the 2016 Key Trends in North American Hedge Funds report.