Image source: All American Environmental
According to (Reuters) – “Investors pulled an estimated $26 billion from hedge funds during the third quarter, according to data provider HFR, jarred by a global stock market plunge, soaring bond yields and geopolitical tensions.“
The data source claims that a $12.4 billion loss in assets from hedge funds that make wagers on the equities markets was the main cause of the outflows. Even when a hedge fund strategy was performing well, money still flowed out of it and the outflows continued to reach new highs.
Hedge funds are seeing massive drawdowns and even though funds which are performing better than others are still struggling.
The largest hedge funds saw the greatest performance reductions, and the sum of the funds other investors have given them to handle is known as assets under management, according to HFR.
If the market continues to struggle hedge funds could see margin calls and more outflows from investors which could in fact cause even more damage to the markets moving forward.