Sat, Apr 19, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge funds post $15.7bn inflows in March with investor favor moving toward emerging markets and fixed income

Monday, May 09, 2011
Opalesque Industry Update - The hedge fund industry posted an inflow of $15.7 billion (0.9% of assets) in March 2011, report BarclayHedge and TrimTabs Investment Research. The inflow marks the third straight as well as the seventh in eight months. Industry assets rose to $1.8 trillion, the highest level since October 2008.

“We expect recent strength to persist in light of a particularly kind landscape,” explains Sol Waksman, founder and President of BarclayHedge. “Seasonality works in favor of the industry through June, high commodity prices leave sovereign wealth funds with a lot of cash to invest, and returns have been strong. The Barclay Hedge Fund Index boasts a positive return in each of the seven months through March.”

Commodity trading advisors (CTAs) took in $6.0 billion (1.9% of assets) in March, the fourth straight inflow as well as the twelfth in 13 months, while funds of hedge funds took in $3.4 billion (0.6% of assets), the second straight inflow. Meanwhile, hedge fund investors are sticking with two long-time favorites. Emerging markets funds hauled in $3.4 billion (1.4% of assets), the eighth straight inflow, while fixed income funds took in $3.3 billion, the third straight inflow as well as the tenth in 11 months. These two strategies account for about half of all hedge fund inflows in 2011.

“The strength of flows into fixed income is remarkable,” notes Vincent Deluard, Executive Vice President of Research at TrimTabs. “Hedge funds investors and retail investors alike are keen on the space, while speculative traders and the Fed are buying Treasuries in size. Although many market participants expect interest rates to increase after QE2 closes at the end of June, prices have plenty of support at present.”

The TrimTabs/BarclayHedge Survey of Hedge Fund Managers for April reveals that 58% of managers do not expect the Fed to start tightening in 2011. Meanwhile, 23% of managers aim to lever up in the coming weeks even though they remain generally bearish on the S&P 500.

“Managers have been rather schizophrenic,” explains Deluard. “They are concerned that stock prices have climbed too far too fast, but many of them have exceeded their 2007 high-water marks and show no interest in deleveraging. Margin debt has been soaring for seven months in part because being able to borrow on the cheap to keep playing the momentum game is too great a temptation to resist.”

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