Global hedge funds attracted USD 24.8 bn in net inflows in 2Q 2025, the highest quarterly figure since 2Q 2014, according to the HFR Global Hedge Fund Industry Report. Hedge funds weathered early-quarter volatility, supported by an improving market risk climate amid US budget progress, stronger economic signals, trade talk developments, and easing geopolitical tensions, HFR said. Reuters also had the story.

AUM hit another record: Total hedge fund capital climbed to USD 4.7 tn in 2Q, up by USD 212.7 bn from the previous quarter, making the seventh consecutive quarterly record high. This came on the back of risk-seeking investors who targeted the largest firms.

Big is getting bigger: The majority of the new capital was directed to the industry's largest firms, as managers with over USD 5 bn in assets attracted USD 22.9 bn in inflows, while those below that mark pulled in less than USD 2 bn.

How were the returns? The HFRI Fund Weighted Composite Index gained 4.3% during the second quarter, led by gains of Equity Hedge-managed assets, up 7.6%, and Event-Driven assets, up 5.3%. Meanwhile, assets managed by Macro strategies fell by 1.4%.

For the first half of the year, hedge funds saw their strongest inflows since 2015, attracting USD 37.3 bn, significantly up from USD 7.2 bn in the same period last year. Gains for the half averaged 3.9%, trailing behind the S&P 500’s 5.5% rise.

More inflows are on the way: “Institutions are likely to continue expanding allocations to funds which have demonstrated their strategy’s ability to deliver strong, uncorrelated performance gains through the dislocation and disruptive market cycles of the first half of 2025,” said HFR President Kenneth Heinz.

MARKETS THIS MORNING-

Asian markets are trading mixed this morning, after China kept interest rates unchanged. Shanghai Composite is up 0.5%, while Japan’s Nikkei is inching down by 0.2%. Meanwhile, Wall Street futures are keeping steady as investors await for more earnings, especially from big tech.

ADX

10,262

+0.2% (YTD: +9.0%)

DFM

6,094

-0.2% (YTD: +18.1%)

Nasdaq Dubai UAE20

5,067

+0.1% (YTD: +21.6%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

4.2% o/n

4.2% 1 yr

TASI

10,965

-0.4% (YTD: -9.0%)

EGX30

34,071

+0.7% (YTD: +14.5%)

S&P 500

6,297

0.0% (YTD: +7.1%)

FTSE 100

8,992

+0.2% (YTD: +10.0%)

Euro Stoxx 50

5,359

-0.3% (YTD: +9.5%)

Brent crude

USD 69.28

-0.4%

Natural gas (Nymex)

USD 3.57

+0.7%

Gold

USD 3,358

+0.4%

BTC

USD 118,022

+0.3% (YTD: +26.1%)

Chimera JP Morgan UAE Bond UCITS ETF

AED 3.62

0.0% (YTD: +1.5%)

S&P MENA Bond & Sukuk

145.72

0.0% (YTD: +4.1%)

VIX (Volatility Index)

16.41

-0.7% (YTD: -5.4%)

THE CLOSING BELL-

The DFM fell 0.2% on Friday on turnover of AED 677.2 mn. The index is up 18.1% YTD.

In the green: BHM Capital Financial Services (+3.9%), Amanat Holdings (+3.6%) and Al Ramz Corporation Investment and Development (+3.3%).

In the red: Commercial Bank of Dubai (-3.6%), Emirates NBD (-2.4%) and Emirates REIT (-2.0%).

Over on the ADX, the index rose 0.2% on turnover of AED 1.4 bn. Meanwhile, Nasdaq Dubai was up 0.1%.

CORPORATE ACTIONS-

E7 Group's board will vote on Thursday, 24 July on the distribution of an AED 800 mn special dividend to shareholders, according to an ADX disclosure (pdf). The board will also vote on the use of AED 55.05 mn from reserves to repurchase all warrants issued by the company at a maximum price of AED 2.40 per warrant. All proposals require approval at an upcoming general assembly meeting, for which the board will set the date.

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