Hedge Fund Performance Improves in July with Strong Capital Inflows and Record Treasury Volumes

Hedge fund performance showed improvement in July, with the average weighted return rising to 0.6%, up from 0.4% in June. Over two-thirds of hedge fund strategies ended the month in the black, according to the latest Monthly Hedge Fund Update from Citco.

The data from the $2 trillion asset-servicing giant reveals that fixed income arbitrage outperformed with a 1.4% weighted average return, followed by multi-strategy and global macro funds. All asset under administration (AUA) categories posted positive returns for July, with funds holding between $1 billion and $3 billion AUA achieving the highest weighted average return of 1.1%. Funds in the $200 million to $500 million range also performed well, posting a weighted return of 0.8%, demonstrating solid performance among mid-sized funds.

Hedge fund capital flows returned to positive territory, recording net inflows of $3.3 billion in July. Subscriptions totalled $10 billion, surpassing redemptions of $6.7 billion, bringing the year-to-date net inflows to $3.1 billion.

July also marked a record in treasury payment volumes, with 52,650 transactions, surpassing the previous high set in December 2023. This surge indicates ongoing strong market activity. Geographically, funds in the Americas ($1.9 billion) and Europe ($1.6 billion) saw positive net inflows, while funds in Asia experienced a net outflow of $0.2 billion.