Hedge fund performance improved in July to an average weighted return of 0.6%, up from 0.4% in the previous month, with over two-thirds of strategies ending the month in positive territory, according to the latest Monthly Hedge Fund Update from Citco. Data from the $2tn AUA asset-servicer shows that fixed income arbitrage led the way with a 1.4% weighted average return, followed by multi-strategy and global macro. Funds with $1bn to $3bn AUA achieved the highest weighted average return of 1.1%, closely followed by funds with $200m to $500m with a weighted return of 0.8%, indicating solid performance among mid-sized funds. Hedge fund capital flows also returned to positive territory over the month with net inflows of $3.3bn. Funds in the Americas ($1.9bn) and Europe ($1.6bn) both saw positive net inflows in July, while Asia funds saw net outflow of $0.2bn.