Tue, Oct 25, 2016
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.”



What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
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. M&A - U.S. hedge fund HarbourVest is shock winner in the £1.1bn SVG Capital takeover saga, Hedge fund Parvus shows hand, toppling William Hill merger deal[more]

    U.S. hedge fund HarbourVest is shock winner in the £1.1bn SVG Capital takeover saga From Thisismoney.co.uk: The fierce battle to buy Britain's biggest private equity group has come to an unexpected conclusion, with the original bidder walking away with the prize. SVG Capital has agreed

  2. Marc Lasry: Energy is still a phenomenal opportunity[more]

    From CNBC.com: Distressed debt specialist Marc Lasry said energy debt is still a "phenomenal opportunity" because investors can get "massively overpaid" for the risk they take on. There are "huge opportunities" in the energy sector especially in restructurings, the Avenue Capital Group CEO said Tues

  3. Opalesque Exclusive: Ex-SAC manager re-emerges with market neutral hedge fund[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: A manager re-emerged from the SAC battleground last year to launch his own hedge fund under the umbrella of New York-based investment firm Endicott Group.

  4. North America - Hedge-fund manager Kyle Bass says the U.S. is on track for stagflation, Billionaire hedge fund titans Dinan, Lasry on election, markets and best investment ideas[more]

    Hedge-fund manager Kyle Bass says the U.S. is on track for stagflation From Marketwatch.com: Kyle Bass, founder of Hayman Capital Management, on Wednesday warned that the U.S. is headed toward so-called stagflation. Stagflation is typically described as persistently high inflation and hi

  5. David Einhorn speaks on passive investing, Mylan, his cheapest stock, the Fed[more]

    From Forbes.com: Greenlight Capital hedge fund manager David Einhorn (Trades, Portfolio) joined nine other famed investors on Tuesday to talk about stocks at the annual Great Investors’ Best Ideas Investment Symposium in Dallas. Presenters at the annual conference typically pitch one or severa