Wed, Nov 26, 2014
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. Investing - George Soros puts $500m of his money on Bill Gross, Soros, Paulson backed Hispania Activos mulls Realia takeover, Ex-Credit Suisse trader’s hedge fund sees yen shorts as crowded, Hedge hunters double default-swaps as views split, Large hedge fund positions come under pressure, Vikram Pandit's fund picks 50% stake in JM Financial's realty lending arm for $87m[more]

    George Soros puts $500m of his money on Bill Gross From WSJ.com: Before Bill Gross was fully settled in at his new firm, Janus Capital Group Inc., he received an unlikely visit from the chief investment officer of famed investor George Soros ’s firm, according to a person familiar with t

  2. Europe - Hedge funds face exit tax as Iceland central bank discusses plan[more]

    From Bloomberg.com: Hedge funds and other creditors with claims against Iceland’s failed banks face an exit tax as the island looks for ways to unwind capital controls without hurting the economy. The government targets having a plan it can present by year-end that would map out how Iceland will sca

  3. Opalesque Exclusive: Risk management emerges as a competitive focus area for hedge funds[more]

    Bailey McCann, Opalesque New York: Risk management has always been a core component of any trading strategy, as well as a critical part of business management. However, as macreconomic weakness persists, and alpha becomes increasingly hard to generate, risk management as emerged as a more promin

  4. Unlucky Paulson & Co. rebrands $1.6bn Recovery Fund after 13% drop[more]

    From Businessweek.com: A maturing U.S. economic recovery is prompting Paulson & Co. to change course. The $19 billion hedge fund firm, led by billionaire John Paulson, told investors on a conference call this month that the Paulson Recovery Fund will be renamed Paulson Special Situations Fund on Jan

  5. Gross: Inflation is required to pay for prior inflation[more]

    Benedicte Gravrand, Opalesque Geneva: As inflation rises, every dollar will buy a smaller percentage of a good. While deflation will mean a decrease in the general price level of goods and services. These two economic conditions are both in the waiting room. The consensus would like the former to