Citco’s Q3 2024 Hedge Fund Report highlights an 8th consecutive quarter of positive returns, with hedge funds achieving a weighted average return of 3.22% and YTD returns of 11.03%. Top-performing strategies include Equity (15.14% YTD) and Global Macro (12.11% YTD). Treasury payment volumes hit record highs, and hedge funds saw $1.1 billion in net inflows, signaling strong investor confidence.
The Citco group of companies (Citco), a global leader in asset servicing with $2 trillion in assets under administration (AUA), has published its Q3 2024 Hedge Fund Report. This comprehensive review marks the eighth consecutive quarter of positive returns for hedge funds, reinforcing the sector’s resilience and adaptability in evolving market conditions.
Overview of Hedge Fund Performance
Hedge funds recorded an overall weighted average return of 3.22% in Q3 2024, an improvement from 1.09% in Q2 2024. Year-to-date (YTD) returns reached an impressive 11.03% as of September 30th, with 83% of funds in positive territory for the year. Notably, the standout performers were:
- Global Macro Strategies: Delivered a weighted average return of 5.25%, achieving a YTD return of 12.11%.
- Fixed Income Arbitrage Funds: Recorded a 4.09% return in Q3, bringing YTD returns to 5.48%.
- Equity Strategies: Maintained strong gains with a Q3 return of 3.79%, leading all strategies with a YTD return of 15.14%.
Insights on Assets Under Administration (AUA)
Across all AUA categories, funds recorded positive returns in Q3. Notably:
- Funds with $1-$3 billion AUA delivered the highest weighted average return of 5.34%.
- Mid-sized funds with $500 million-$1 billion AUA followed with 3.51%, and funds with $200 million-$500 million AUA recorded 3.08%.
- Funds managing more than $3 billion AUA achieved 2.65%, while those with less than $200 million AUA recorded 2.55%.
Treasury and trade volume trends
Treasury payment volumes set a new record with 151,662 transactions in Q3, marking the sixth consecutive quarter of increased activity. High-frequency trading strategies continued to dominate trade volumes, especially in July and August, driven by market volatility and anticipation of interest rate movements.
Hedge funds saw net inflows of $1.1 billion during Q3, following $4.7 billion in Q2. Multi-Strategy funds attracted the highest net inflows of $3.7 billion, closely followed by hybrid funds with $3.6 billion. Regional flows also showed positive trends, with Europe leading at $2.8 billion in net inflows, while the Americas posted $0.1 billion.
Emerging market trends and strategic takeaways
Q3 2024 witnessed notable investor interest in Multi-Strategy and hybrid funds, reflecting a preference for diversified and adaptable investment approaches. While some strategies like Global Macro and Equity faced outflows, the continued positive YTD returns underline the sector’s strategic resilience.
The report also underscores the role of efficient treasury management in driving alpha, as demonstrated by Citco’s record-setting payment volumes. The consistent inflows into hedge funds signal investor confidence in the industry’s capability to navigate macroeconomic challenges effectively.
Himani Verma is a seasoned content writer and SEO expert, with experience in digital media. She has held various senior writing positions at enterprises like CloudTDMS (Synthetic Data Factory), Barrownz Group, and ATZA. Himani has also been Editorial Writer at Hindustan Time, a leading Indian English language news platform. She excels in content creation, proofreading, and editing, ensuring that every piece is polished and impactful. Her expertise in crafting SEO-friendly content for multiple verticals of businesses, including technology, healthcare, finance, sports, innovation, and more.
