According to the Citco Group, servicing assets under management in the amount of $1,6 trillion, in the third quarter, the global hedge fund industry experienced a positive net inflow of $6 billion amid rising volatility. Overall for the first nine months 2021 year net inflow was $23,7 billion.
In the third quarter, all hedge fund strategies on the Citco platform showed positive profitability. Although the quarter showed relatively good hedge fund performance, they were still different from the figures 1 and 2 quarters: funds on the platform provided an average return in 1,15% in the third quarter compared to 8,25% and 6% in the first and second quarters, respectively.
Event strategies showed the best results, providing a weighted average return in 6,46%, and the worst — multistrategies, with the result 0,39%. Continuing the trend of the previous quarter, the highest yield was received by large funds with assets of more than $3 billion — average 1,57% in the III quarter.
For the second consecutive quarter, Citco observes a strong correlation between volatility and trading volumes. Despite a relatively calm July, trading volumes in the third quarter became the second in intensity after the first quarter 2021 as a result of a sharp surge in volatility in September. Shares remained the most traded asset class in the third quarter, however, in September on 36% trade in fixed income products increased, credit default swaps and interest rate swaps, which indicates a wider use of this group of products by hedge funds.
Based on Hedge Week