Hedge fund inflows reach 12-month high despite market volatility, SS&C data shows
Hedge fund investor flows climbed to their highest level in 12 months in August, with net subscriptions continuing to rise despite heightened inflation concerns, geopolitical risks and broader market volatility, according to SS&C Technologies.
In August, hedge fund investor flows hit their highest level in 12 months, according to SS&C Technologies. Despite concerns over inflation, geopolitical risks, and market volatility, net subscriptions continued to rise. The SS&C GlobeOp Capital Movement Index rose 0.92% to 132.34, marking its seventh consecutive month of positive net inflows.
This index has gained 5.25 points in the past year, indicating enduring demand for hedge fund strategies from investors even in a challenging market environment. SS&C Technologies Chairman and CEO Bill Stone attributed the increased volatility to the combination of rising inflation, geopolitical uncertainty, and changes in Federal Reserve policy.
Stone argued that the situation reinforced the need for long-term allocations to hedge funds, particularly those designed to generate returns with low correlation to traditional asset classes. However, this increased capital flow contrasts with weaker performance in July, as reflected by a -2.93% gross return for the month in the SS&C GlobeOp Hedge Fund Performance Index.
This index provides a monthly snapshot of aggregate hedge fund performance across funds managed by SS&C GlobeOp, designed to avoid selection and survivorship bias. Over its 16-year history since 2006, the index has demonstrated a correlation of around 25% to 30% with major equity market indices, showcasing the diversified return profile of the represented strategies.
The Capital Movement Index, which measures net subscriptions and redemptions across hedge funds on the SS&C GlobeOp platform, increased by 0.92 points in August, reaching its highest level in a year. The data is based on actual capital movements, not just investor intentions or surveys, calculated and verified through the processing of subscriptions and redemptions on the platform.
These ongoing inflows suggest that investors are maintaining their appetite for hedge funds, even as market conditions become more uncertain. SS&C GlobeOp is set to release its next Capital Movement Index update on September 14th.
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