Hedge funds continued their resurgence in Q2, recording positive performance for a third consecutive quarter, with equities and multi-strategy funds once again driving returns to take their YTD weighted average gains to over 10%, according to data from Citco.

Hedge funds continued their resurgence in Q2, recording positive performance for a third consecutive quarter, with equities and multi-strategy funds once again driving returns to take their YTD weighted average gains to over 10%, according to data from Citco.

Hedge funds administered by the Citco group of companies (Citco), achieved a weighted average return of 2.77% overall in the second quarter, to give them a YTD return of 8.04%.
 
Equities and multi-strategy funds were the best performers in the second quarter, with weighted average returns of 4.52% and 2.54% respectively, taking their YTD returns to 10.34% and 10.14%. Not all funds rose however, with commodities and global macro funds seeing negative returns of -2.02% and -2.15% to take their YTD returns to -4.3% and -4.08% respectively.
 
All AUA categories once again generated positive weighted average returns for the second quarter in a row in 2023. Funds with between $1-3bn of assets were the top performer in Q2, with a weighted average return of 3.3%, followed by the $200m-$500m category at 3.08%. Funds with more than $3bn of assets were next, at 2.8%, edging out the $500m-$1bn funds which delivered 2.4%. The smallest funds with assets below $200m rounded it off with a return of 0.55%. 

The gains over the most recent quarter meant the largest funds with more than $3bn of assets had a YTD return of 10.63%, with the other categories all up as well, although by smaller amounts.
 
Capital flows were negative in Q2, with net redemptions of $7bn. Much of this was focused on equities funds which saw net outflows of $6.5bn in Q2. However, both multi-strategy and Hybrid funds enjoyed a positive quarter in terms of flows, with net inflows of $0.8bn and $2bn, respectively.