Citco: Hedge funds continue increases in Q3
18 November 2021 UK
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The global hedge fund industry saw positive net inflows of US$6 billion during Q3 2021, according to hedge fund administrator group Citco.
This has caused the overall net inflows for 2021 so far to reach $23.7 billion amid increasing volatility, Citco notes in its Q3 2021 Hedge Fund Report.
The report provides analysis of performance patterns, trade and treasury volumes, and investor flow trends within the global hedge fund industry.
From this research, Citco finds that all hedge fund strategies and the majority (59 per cent) of assets under administration on Citco’s platform delivered positive returns in Q3.
However, funds on the platform delivered an overall weighted average return of 1.15 per cent in Q3, which marks a considerable decline compared to 8.25 per cent and 6 per cent in Q1 and Q2 respectively.
According to Citco, event-driven strategies performed best across its hedge fund universe during Q3, while multi-strategy had the lowest weighted average return at 0.39 per cent.
Q3 is the second consecutive quarter where it observes a strong correlation between volatility and trading volumes, with volumes being the second-highest on record following a “sharp spike in volatility” in September.
Equity and equity swaps remain the most-traded asset classes over the quarter, although fixed income products, credit default swaps and interest rate swaps all experienced increases in trading activity.
Declan Quilligan, head of hedge fund services at Citco Fund Services (Ireland), summarises: “Despite significant volatility in September, global hedge funds have demonstrated their resilience to achieve positive returns across asset classes, fund strategies and geographies.”
“Net positive inflows to Citco funds and heightened trade volumes have increased the need for Citco’s streamlined, digitised and transparent treasury and accounts payable workflows, which are more important than ever to provide asset managers with the tools they need to grow,” he adds.
This has caused the overall net inflows for 2021 so far to reach $23.7 billion amid increasing volatility, Citco notes in its Q3 2021 Hedge Fund Report.
The report provides analysis of performance patterns, trade and treasury volumes, and investor flow trends within the global hedge fund industry.
From this research, Citco finds that all hedge fund strategies and the majority (59 per cent) of assets under administration on Citco’s platform delivered positive returns in Q3.
However, funds on the platform delivered an overall weighted average return of 1.15 per cent in Q3, which marks a considerable decline compared to 8.25 per cent and 6 per cent in Q1 and Q2 respectively.
According to Citco, event-driven strategies performed best across its hedge fund universe during Q3, while multi-strategy had the lowest weighted average return at 0.39 per cent.
Q3 is the second consecutive quarter where it observes a strong correlation between volatility and trading volumes, with volumes being the second-highest on record following a “sharp spike in volatility” in September.
Equity and equity swaps remain the most-traded asset classes over the quarter, although fixed income products, credit default swaps and interest rate swaps all experienced increases in trading activity.
Declan Quilligan, head of hedge fund services at Citco Fund Services (Ireland), summarises: “Despite significant volatility in September, global hedge funds have demonstrated their resilience to achieve positive returns across asset classes, fund strategies and geographies.”
“Net positive inflows to Citco funds and heightened trade volumes have increased the need for Citco’s streamlined, digitised and transparent treasury and accounts payable workflows, which are more important than ever to provide asset managers with the tools they need to grow,” he adds.
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