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Inflows and Profits Bring Assets to $4.8 Trillion

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Stockholm (HedgeNordic) – Total hedge fund assets reached an estimated $4.8 trillion at the end of 2021, as December trading profits amounting to $39.8 billion exceeded the month’s $20.4 billion in redemptions, according to BarclayHedge. A string of nine consecutive months of inflows, together with strong trading profits during the year, led to hedge fund assets growing by almost 23 percent year-over-year in 2021.

“Investor interest in hedge funds has been so robust and consistent throughout 2021.”

“It is not at all unusual to see net outflows kick up in December as investors realize profits, harvest losses and rebalance their portfolios before the close of the calendar year,” comments Ben Crawford, Head of Research at BarclayHedge. “The previous five years all saw net outflows in December, and, in percentage terms, the outflows in 2021 were unexceptional,” he continues. “Investor interest in hedge funds has been so robust and consistent throughout 2021 that even this modest end-of-year outflow serves only to accentuate the trend by contrast: Even after a $20 billion outflow in December, aggregate industry inflows exceeded outflows by more than $200 billion.”

“Even after a $20 billion outflow in December, aggregate industry inflows exceeded outflows by more than $200 billion.”

The hedge fund industry attracted $200.7 billion in net inflows during 2021. The $215.0 billion in trading profits generated by the industry throughout the year brought total hedge fund industry assets to $4.8 trillion, up from $4.69 trillion at the end of November and $3.91 trillion at the end of 2020. The fixed-income strategy category enjoyed the highest inflows in 2021, attracting an estimated $71.7 billion in net inflows, according to the Barclay Fund Flow Indicator published by BarclayHedge. Sector-specific funds and multi-strategy funds attracted net inflows of $45.4 billion and $42.3 billion, respectively.

Balanced funds experienced the largest redemptions over the 12 months ending December, with the group experiencing an estimated $15.6 billion in net outflows or 2.8 percent of assets. Macro funds incurred net outflows of $12.8 billion or 6.7 percent of assets, equity long-bias funds experienced $8.8 billion in redemptions or 2.5 percent of assets and global emerking markets funds booking $6.5 billion in ouflows or 5.3 percent of assets. The CTA industry attracted more than $4.6 billion in new assets in 2021, with the group’s $23.0 billion in trading profits bringing the CTA industry’s assets to $356.6 billion at year end, up from $302.7 billion at the end of 2020.

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Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

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