Jittery investors reportedly have yanked more than $10 billion from hedge funds so far this year, with the bloodshed expected to continue.
And the experts expect more redemptions this quarter due to the mix of poor returns and December usually being a month of “elevated” outflows, even during the boom times, according to an eVestment report cited by the New York Post.
Although new money was added to the $3.2 trillion industry in the first half of 2018, continued volatility and weak returns have investors headed for the door, the Post explained.
There have been only three other years that money left the industry since 2004, eVestment noted, referring to 2008, 2009 and 2016.
“It’s clearly a difficult time,” said Peter Laurelli, global head of research at eVestment.
To be sure, the most popular long positions at 823 hedge funds have lagged the S&P 500 by 7 percentage points since mid-June, according to Goldman Sachs.
"Hedge fund returns, portfolio leverage, and the performance of popular stocks have entered a vicious downward cycle," wrote Goldman's David Kostin, CNBC reported.
The average equity hedge fund is down 4 percent this year, according to Goldman. Funds saw their worst monthly performance in three years in October, down 2.35 percent on average, according to financial data company Preqin.
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