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Expand chart
Data: eVestment; Table: Axios Visuals

Hedge funds continue to struggle this year with divergence among large and small funds growing more stark.

What's happening: Inflows and strong performance by large fund managers pushed the total level of assets under management to an all-time high in the first 6 months of 2019, despite an overall decline in assets. The HFR Global Hedge Fund Industry Report shows hedge funds increased assets to $3.245 trillion, edging past the previous record set in the 3rd quarter of 2018.

Between the lines: The redemptions were largely concentrated in smaller funds, as managers who oversee strategies with less than $5 billion of assets saw net outflows of $10 billion, while funds with more than $5 billion of AUM saw inflows of $5.4 billion. It was the first quarterly net inflow of capital for the large funds since the 4th quarter of 2017, HFR's data shows.

  • Hedge funds are still struggling broadly as the stock market continues its bull run. Even simple index funds that mix 50% global stocks with 50% global bonds, offering investors some downside protection at much lower cost, have outperformed much of the industry in recent years.

What they're saying: Peter Laurelli, global head of research at data firm eVestment, notes in a recent eVestment hedge fund report that the majority of hedge funds continue to see investors pull their money out, and flows for the quarter were "the worst the industry has seen in a second quarter for as long as we have tracked the industry’s flows [since 2004]."

The bottom line: That's bad news, especially since the first half of the year was the best hedge funds have performed since 2009 and there are around $13 trillion of negative-yielding bonds in the world, making a potential source of competition less attractive.

Go deeper: The hedge fund moment is over

Go deeper

Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Vaccines: U.S. ahead of pace on vaccines.
  2. Health: Lessons for trapping the next pandemic.
  3. Tech: "Fludemic" model accurately maps COVID hotspotsVirtual doctor's visits and digital health tools take off.
  4. Politics: Harris breaks tie as Senate proceeds with lengthy debate on COVID relief bill — Republican governor of West Virginia says there's no plan to lift mask mandate.
  5. World: Canada vaccine panel recommends 4 months between doses — In AstraZeneca spat, EU fights hard for a vaccine its hardly using.
Dave Lawler, author of World
1 hour ago - World

In AstraZeneca spat, EU fights hard for a vaccine it's hardly using

Macron, Merkel and European Council President Charles Michel (R) at a summit in October. Photo: Yves Herman/Pool/AFP via Getty

Italy on Thursday blocked the export of 250,000 AstraZeneca doses to Australia, becoming the first EU country to exercise an export ban due to a vaccine shortfall in the bloc.

Why it matters: The controversial step exposes multiple major challenges to distributing vaccines — even among the world’s richest countries.

Dave Lawler, author of World
2 hours ago - World

Global freedom continues steady decline: report

The global erosion of democracy has continued for a 15th consecutive year, according to an annual report from Freedom House.

Zoom in: The report calls particular attention to India, which slipped from “free” to “partly free” due to the government's “scapegoating of Muslims” and “crackdown on critics.” Prime Minister Narendra Modi is, according to the report, “driving India itself toward authoritarianism.”