In April, hedge funds experienced their first negative month of 2024, with nearly all strategy types seeing declines. Despite this setback, hedge funds maintain a positive outlook for the year, with a year-to-date (YTD) return of 6.5%, data has shown.
According to the Citco group of companies, the overall weighted average return fell to -0.7%, a drop from March’s 2.2%. The hardest-hit strategy was event driven funds, which reported a weighted average return of -2.1%. Equities followed with a -1.3% return, and global macro strategies recorded a -1% decline. Other strategies, including fixed income arbitrage and multi-strategy funds, experienced smaller losses of -0.3%. In contrast, commodities strategies were the standout performer, achieving a 2.1% return, marking their best month in 2024 and maintaining consistent positive performance throughout the year.
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Asset size also played a role in performance, with the largest funds (over $3 billion in assets under administration, AUA) showing a weighted average return of -1%. Smaller funds with less than $200 million of AUA saw returns of -0.9%, while mid-sized funds ($200 million to $500 million AUA) posted -0.8%. Interestingly, funds in the $500 million to $1 billion AUA category were the only group to see positive returns in April, at 0.1%.
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Capital flows turned positive for hedge funds in April, with net inflows of $5.7 billion, marking the highest net inflows of the year. Subscriptions totalled $11.8 billion, outpacing redemptions of $6.2 billion. This shift brought YTD net inflows to $2.6 billion. Multi-strategy funds led the way with $2 billion in net inflows, followed by Fund of Funds at $1.1 billion and Hybrid funds at $0.9 billion. Only event driven funds saw net outflows, though these were modest at $0.1 billion.
On a regional basis, the Americas experienced the highest net inflows at $4.2 billion, with Europe and Asia also returning to positive territory with $0.9 billion and $0.6 billion, respectively. Looking ahead, while projections suggest potential outflows later in the quarter, these forecasts remain subject to change as market conditions evolve.
