Hedge funds suffered a third consecutive month of outflows in July as investors withdrew $5.7 billion, according to industry tracker Eurekahedge.

Redemptions totaled $20.7 billion in the three months through July, with money managers betting on equities suffering $18.4 billion of withdrawals, Eurekahedge said in a report on Tuesday. 

Hedge funds are under pressure as some of their biggest and oldest backers such as pensions and endowments reduce allocations because of poor performance and high fees. The industry posted an average 2.5 percent return this year through July, according to Eurekahedge, while the S&P 500 Index returned 7.7 percent.

The industry managed $2.3 trillion at the end of July, Eurekahedge said.

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