Sun, Apr 20, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge funds post inflow of $11.3bn in August, investors hungrier for risk - BarclayHedge/TrimTabs Research

Monday, October 11, 2010
Opalesque Industry Update - TrimTabs Investment Research and BarclayHedge reported that the hedge fund industry posted an estimated inflow of $11.3 billion (0.7% of assets) in August 2010, the largest inflow since February, after redeeming a total $3.1 billion (0.2% of assets) in June and July.

“Hedge fund managers exhibited caution in August and it served them well,” said Sol Waksman, founder and President of BarclayHedge. “The industry outperformed the market by a large margin. While the S&P 500 sank 4.7%, hedge funds posted a negative return of less than 1%.”

Hedge fund investors have grown hungrier for risk. Emerging Markets funds posted an inflow of $2.5 billion (1.3% of assets) in August following three straight monthly redemptions. Macro funds posted an inflow of $2.1 billion (2.3% of assets), the largest inflow since June 2008. Meanwhile, commodity trading advisors (CTAs) posted an inflow of $2.2 billion (1.0% of assets), the fifth straight inflow as well as the twelfth in 15 months. In contrast, funds of hedge funds redeemed $2.3 billion (0.4% of assets), the sixth outflow in nine months.

“We suspect hedge fund managers might invest aggressively in the current quarter,” said Vincent Deluard, Executive Vice President at TrimTabs. “The fresh cash flowing into the industry needs to be put to work. Further, about a third of managers are sitting on a year-to-date return of less than 1%, so they need to end the year with a bang in order to collect fat performance fees. Additionally, margin debt is relatively low and being able to borrow for virtually nothing provides a strong incentive to lever up.”

Like retail investors, hedge fund investors continue to flock to bonds. Fixed Income hedge funds posted an inflow of $2.3 billion (1.4% of assets) in August, the sixth inflow in seven months. Fixed Income funds boast a year-to-date return of more than 9%, far and away the best performance of any hedge fund strategy.

“We’re never keen on stepping in front of a speeding locomotive, but we are concerned about the $687 billion mom and pop have poured into bond mutual funds and ETFs since the start of 2009,” noted Deluard. “Given a 10-year Treasury yield of less than 2.5% and a two-year yield that rounds to zero, what will bond enthusiasts do when the piper demands to be paid?”

(press release)

Source

kb

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Banner
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Classic Auto Funds Limited (CAF) launches several car investing funds[more]

    Bailey McCann, Opalesque New York: A new trend in alternative alternatives is emerging - car appreciation funds. Classic Auto Funds Limited (CAF) is the first to market with several funds that make super elite luxury cars into real asset investments. As a result of growing overseas demand couple

  2. CTAs could face new challenges in a rising rates environment[more]

    Bailey McCann, Opalesque New York: CTAs have taken a beating performance wise lately, and asset flows reports show that investors aren't sticking around to see how the movie ends. Now, a new white paper from Roy Niederhoffer and Coen Weddepohl notes that as interest rates start to tick back u

  3. Investing – Big hedge funds bought Puerto Rico's junk bonds, Fidelity explores new trading venue amid flash trade concerns, Crisis-era Greek bonds reward early buyers with big effective returns, Cargill unit discloses stake in Freddie preferred[more]

    Big hedge funds bought Puerto Rico's junk bonds From Reuters.com: Several large hedge funds doubled down on Puerto Rico in last month's giant bond sale despite the U.S. territory's financial struggles, the Wall Street Journal reported, citing confidential documents reviewed by the newspa

  4. Opalesque Exclusive: Hedge fund replicators evolve[more]

    Bailey McCann, Opalesque New York: Hedge fund replicators as a group of products tend to get a bad rap from hedge fund managers who suggest that the best a replicator can offer is dynamic beta capture. A

  5. Commodities – Popular value fund manager David Iben bets on Russia, gold,[more]

    From Reuters.com: With large bets on Russia and North American gold miners, one of the best performing stock pickers in the wake of the 2008 financial crisis is back with a new fund that reflects his deep aversion to following the crowd. In the Kopernik Global All-Cap Fund, David Iben is follo