Hedge funds delivered an “impressive” performance in July with an overall weighted average return of 1.5%, revealed data from the Citco group of companies (Citco).
July was the “best month” of 2023 for hedge funds, despite a slight decline from June’s 1.8% monthly high, said the alternative asset servicer.
77.5% of funds administrated by Citco had positive returns in July, taking the company’s overall year-to-date weighted average return of funds to 9.6%. The rate of return spread fell from 8.8% in June to 6.7% in July, signifying a decrease in the volatility of returns.
Equities strategies (1.8% weighted average return), fixed income arbitrage (1.6% weighted average return) and global macro (1.5% weighted average return) were the “top-performing” strategy types, noted Citco.
Commodities funds gained its first positive monthly return in July with weighted average returns of 1.3% following a drop in energy and metal prices this year. Funds in the $200M-$500 million category delivered the highest weighted average return of 2.6%, noted Citco.
Following June’s trend, investor flows continued to be negative in July but at a much lower level of redemptions and subscriptions. Net outflows came in at $2.7 billion, driven by redemptions of $9 billion against subscriptions of $6.3 billion. All strategies experienced net outflows or remained static on flows, except arbitrage funds gaining subscriptions worth $200 million.
According to regions, America-based funds saw net redemptions of $2.4 billion in July, and Asia lost $800 million. Europe bucked the trend with a “low level” of net subscriptions at $500 million.
According to data, demand for trade matching services climbed sharply in Q2, with cash trades and swaps climbing 31% and 33%, respectively. Citco forecast investors to withdraw $10.9 billion at the end of Q3 – a figure expected to increase to $11.7 billion.
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