MILAN, Italy (HedgeWorld.com)–Italian investors continued to redirect a portion of their assets toward hedge funds in May. The category ended the month with net inflows of almost 740 million euro ($936 million). The rise in hedge fund investments continued even as all funds posted net outflows of almost 5.2 billion euro over the period.
Italian investments in domestic and foreign hedge funds were almost 24.4 billion euro at the beginning of May, up from approximately 23.4 billion euro a month earlier. In spite of a negative overall performance by hedge funds in May, combined effect of inflows and performance should bring the current level of total hedge fund investment to more than 25 billion euro.
Of the six fund categories examined, only hedge funds and flexible funds (balanced funds where the manager is completely free to set asset allocation) ended the month with net inflows. Flexible funds had inflows approaching 3.8 billion euro, an almost 10% month-on-month advance. Equity and bond funds, balanced and money market funds, all saw outflows exceed inflows in May.
Money market funds and equities funds were the month’s heaviest losers, with outflows of around 3.4 billion euro and 3.1 billion euro respectively, or around 4% and 2% of their respective assets under management.