Hedge fund investors renewed their interest in the sector in November after two months of outflows, allocating $5.4 billion to hedge funds, according to eVestment.
The inflows plus performance gains brought hedge fund assets under management to $3.1 trillion in November, eVestment reported.
Positive investor allocation trends, which had persisted for several months leading up to September and October’s volatility, resumed in November. Flows into long/short ($4.5 billion), event-driven ($2.1 billion) and multi-strategy ($4.8 billion) led the industry.
eVestment said the flows into equity exposure were important because they showed a level of continued support for the group in the face of recent volatility.
Although redemptions may still emerge in coming months as a result of the September/October disruption, it said, the net effect may be muted, thanks to the underlying trend in their favor.
The report noted that despite managed futures’ recent positive performance—the strategy is one of the industry’s best performers this year—investors have been slow to shift allocation decisions in managed futures strategies’ favor.
Both macro and managed futures funds faced redemptions of some $4.1 billion in November.
Credit strategies are experiencing a rough patch, eVestment reported. Flows are mixed, with investor preferences leaning to directional strategies in the face of persistent/declining rates.
Interest in exposure to Asia was elevated in November, with Asia-focused strategies receiving inflows of $1.7 billion, according to the report.
Commodity fund flows were slightly positive in November, adding $720 million. eVestment said this was meaningful, given the big price moves in energy and metals over the last three months.