BOSTON (Reuters) - Investors punished hedge funds for poor performance by removing $20.7 billion in cash in June, marking one of the biggest monthly drawdowns since research firm eVestment began tracking flows in 2009.
Stock-focused funds were hit hardest, while commodity- oriented funds managed to pull in money, adding $1.2 billion, eVestment said in a report released on Tuesday.
Since January investors have pulled out nearly $28 billion in assets, shrinking the hedge fund industry to $2.9 trillion, the report said.
June’s flood of redemption requests come after months of disappointing investment returns, plus inflows in May when investors added $6.6 billion.
Even though the average hedge fund is making some money this year after losing it in 2015, a number of big name funds are nursing heavy losses and casting a general pall over the industry. At the same time investors have said they are growing impatient with hedge funds’ hefty fees despite lackluster returns.
Evestment data noted that June marked the first time that even large funds that made money for their clients last year were asked to return funds to investors.
Poor performance fueled redemptions even more, eVestment researchers said, noting that the 10 stock-oriented hedge funds suffering the biggest redemptions in June have each lost roughly 8 percent on average this year.
Multi-strategy funds that pursue a number of investment themes and often require a longer notice period before returning investors’ money faced their biggest wave of monthly outflows since December 2014, the report said.
The year’s biggest winners are so-called managed futures funds where computer models are employed to make securities selection. As a group they performed well during market turbulence following Britain’s decisions to leave the European Union and pulled in $410 million in June.
This year they have recorded net inflows of $14.52, already more than the $13.4 billion they pulled in during all of 2015.
Reporting by Svea Herbst-Bayliss; Editing by Dan Grebler and Alan Crosby