Friday, August 26, 2016

More Losses for Hedge Funds

For hedge funds, the news is getting worse. Investors pulled an estimated $25.2 billion from hedge funds last month, the biggest monthly redemption since a net $28.2 billion was redeemed in February 2009.

The monthly withdrawals were the second straight for the beleaguered industry, which had already seen $23.5 billion pulled in June. They bring total outflows this year to $55.9 billion.

Performance appears to be the main issue:  The ten funds with the highest redemptions in July lost an average of 4.1 percent in the first seven months of this year. Industrywide, funds returned an average of 1.2 percent this year through July, according to data compiled by Bloomberg, compared with about 7.6 percent for the S&P 500 Index.

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