Sat, Feb 25, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge funds take in $6.8bn in February but returns still lag S&P 500

Tuesday, April 10, 2012
Opalesque Industry Update - BarclayHedge and TrimTabs Investment Research reported today that hedge funds took in an estimated $6.8 billion in February, reversing a trend that saw more than $21.5 billion flow out of these funds in January 2012 and December 2011, the largest outflows since July 2009.

Hedge fund managers underperformed the S&P 500 by 180 bps in February, returning 2.3% vs. 4.1% for the S&P 500, according to the monthly TrimTabs/BarclayHedge Hedge Fund Flow Report. Managers also underperformed the S&P 500 in the first two months of 2012, 5.5% vs. 8.6%.

"Despite February’s inflows, below-average performance and net outflows have kept a lid on hedge fund assets near an estimated $1.72 trillion for the past five months,” said Sol Waksman, founder and president of BarclayHedge Funds of hedge funds took in $5.7 billion in February, reversing five months of outflows and returning 1.4%. “Funds-of-funds underperformed hedge funds by 260 bps over the past year,” Waksman said.

“Recent flows into hedge-fund strategies seem to be indicating investors think the latest stock market rally has run its course,” said Charles Biderman, founder and CEO of TrimTabs. Equity Long Bias hedge funds saw an outflow of $6.8 billion in February, the most since they shed $12.4 billion in December 2008. Meanwhile, Equity Long-Short strategies saw an inflow of $1.5 billion in February, the most since they took in $1.7 billion in April 2011.

Japan-based hedge funds have seen surging popularity. “These funds generated an inflow of 16.2% assets in the past year, even though they lost 7.8% in the same period,” said Leon Mirochnik, an analyst at TrimTabs. “It seems these investors did not enjoy the added benefit of currency appreciation in the past 12 months, as the yen gained only 0.7% versus the dollar in that time period.”

Meanwhile, the March 2012 TrimTabs/BarclayHedge Survey of Hedge Fund Managers finds that 63% of managers think the Fed will raise rates before 2014, while 37% think the Fed will not budge from its stance. About 67% of managers do not expect the Fed to launch a third round of quantitative easing in 2012.

The survey also finds a strong note of caution on the U.S. stock market among hedge fund managers. Neutral sentiment on the S&P 500 for April climbed more than 11 percentage points to 40.8% in March from 29.5% in February, according to the survey. Bullish sentiment dove to 30.6% in March from 40.0% in February, and Bearish sentiment dipped to 28.6% in March from 30.5% in February.

The survey of 98 hedge fund managers, conducted in the third week of March, also found that bearish sentiment on the 10-year Treasury had more than doubled, spiking to 48.4% in March from 20.8% in February.

Press release

bc

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. Opalesque Exclusive: Swiss investors take fund seeding and acceleration into their own hands[more]

    Benedicte Gravrand, Opalesque Geneva: Banque Bonhote, a 200-year old Swiss private bank, last year launched a community of investors - heads of Swiss family and advisory offices and wealth managers - with the aim of co-investing in the kind of managers they wanted to invest in, either by way of s

  2. K2 Advisors : Why We Like Activist Hedge Fund Strategies and Some Thoughts on Alpha[more]

    Matthias Knab, Opalesque: Rob Christian, Senior Managing Director, Head of Research K2 Advisors, Franklin Templeton Solutions, writes on Harvest Exchange: When d

  3. Ex-Navy SEAL backed by Mario Gabelli, Jean-Marie Eveillard and other value giants off to strong start[more]

    From Valuewalk.com: Sententia Capital Management is not your average value focused hedge fund. The fund was founded by Michael Zapata, a former Navy Seal Team 6 Officer and has attracted funding from some of the best-known names in the value space. Mario Gabelli, Jean-Marie Eveillard from First Eagl

  4. Europe - 1 trillion euro non-performing loans are clogging EU lending channels[more]

    From Centralbanking.com: As much as 1 trillion euro of non-performing loans (NPLs) are still clogging the lending channel in the European Union. An EU asset management company (AMC) could address market failures in the secondary market for NPLs as part of a suite of measures designed to tackle the b

  5. Investing - Hedge funds' novel approach: investing for longer at lower returns, U.S. hedge fund Delta Partners lifts stake in Bellamy's, Hedge funds stockpile cobalt, electric carmakers on battery alert, Facebook is racking up the likes among the world's biggest hedge funds, Einhorn affirms gold on Trump uncertainty[more]

    Hedge funds' novel approach: investing for longer at lower returns From FNLondon.com: Hedge funds are known for making short-term bets, dipping quickly in and out of markets to take advantage of swings in prices. But, under pressure to innovate, some big-name managers are looking at ways