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Equity Strategies Dominated Hedge Fund Inflows In 2017

eVestment, a provider of hedge fund data and analysis, today published its December 2017 hedge fund asset flows report.

Some of the key findings include:

  • Investors removed an estimated $8.35bn from hedge funds in December, the industry’s lightest level of December redemptions since 2010
  • Equity strategies dominated industry flows in 2017, which has not historically been a good omen for equity markets
  • Macro fund flows were negative in December for a fourth consecutive month
  • 2017 was a rollercoaster year for managed futures investors

The report states:

"December has historically been a month where redemption pressures far outweigh new allocations as investors wait for the new year to put money to work. This December, however, investors removed the least they've removed from the industry in December in seven years.  While seemingly a good sign for an industry in need of good signs, these investor tendencies may also signal negative sentiment toward public markets.

The last two times, post-2008, investors chose to allocate at least this much to equity strategies (2014, and 2010) the ensuing years saw major equity market pullbacks. While allocations to other strategies were mixed, indicating a certain level of dissatisfaction with performance remains, the return of interest in alternative public market equity strategies is intriguing, and a theme to watch closely in 2018."