Thu, May 24, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

BarclayHedge and TrimTabs: Hedge fund investors redeemed $10.8bn (0.6% of assets) in October

Tuesday, December 11, 2012
Opalesque Industry Update - BarclayHedge and TrimTabs Investment Research reported today that hedge fund investors redeemed $10.8 billion (0.6% of assets) in October, reversing a combined $9.8 billion inflow for August and September. Based on data from 3,040 funds, the TrimTabs/BarclayHedge Hedge Fund Flow Report estimated that industry assets stood at $1.8 trillion in October, down 26.1% from the June 2008 peak of $2.4 trillion.

“From a cash-flow standpoint, the hedge fund industry has been losing ground for the past year,” said Sol Waksman, founder and president of BarclayHedge. “October’s redemptions pushed year-to-date outflows to $13.7 billion and 12-month outflows to $22.9 billion.”

Though the flow picture worsened in October, hedge fund investors reaped a net 0.21% gain in October while the S&P 500 Index fell 1.98%, TrimTabs and BarclayHedge reported.

The Hedge Fund Flow Report also showed that performance matters. During the past 12 months, the top 10% performing funds took in $4.8 billion and posted a median gain of 23.5%, handily beating a 15.9% increase in the S&P 500. In contrast, the 10% worst-performing hedge funds experienced outflows of $6.3 billion with a median 11.2% loss, underperforming the industry by 1,543 basis points. The report said the top 40% of hedge fund performers had outflows of $3.0 billion while the bottom 40% saw outflows of $25.2 billion.

“Hedge fund investors are doing fine if they’re buying into the best-performing funds,” said Charles Biderman, founder and CEO of TrimTabs. “Also, the massive outflows from the lowest-performing funds show investors are losing patience with the subpar returns that have plagued the industry over the past year,” Biderman said.

TrimTabs and BarclayHedge reported that the hedge fund industry gained 6.1% year-to-date while the S&P 500 Index rose 12.3%, and earned 4.2% over the past 12 months while the S&P rose 15.9%

The Hedge Fund Flow Report noted that over the past 12 months, the top three hedge fund strategies (Fixed Income, Multi-Strategy, and Macro) took in $43.6 billion while the bottom 10 strategies gave up $64.8 billion, yielding a net outflow of $21.1 billion.

“This underscores the industry’s lack of asset growth and its favoritism toward top-performing strategies,” said Leon Mirochnik, Vice President at TrimTabs.

Equity-related hedge funds continued to underperform the S&P 500 over the past 12 months, Mirochnik said. Equity Long Bias, the best-performing stock-based strategy of the bunch, managed a 4.8% return from November 2011 through October 2012, lagging the S&P 500 by 1,112 bps in the same time.

Of the eight global categories tracked by BarclayHedge and TrimTabs, funds based in China/Hong Kong topped the October performance list at 1.6% while Japan-based funds fared worst at -0.6%. Latin America funds had the worst outflows at 17.1% of assets in October, 26.4% y-t-d, and 29.1% over the past year, despite posting gains in all three time horizons.

Meanwhile, the November 2012 TrimTabs/BarclayHedge Survey of Hedge Fund Managers found that fund managers’ bearish sentiment on the S&P 500 had reached a 12-month high, just a month after bearishness dipped to a 12-month low. Conducted in mid-November, the survey of 89 hedge fund managers also sought their views on the impending “fiscal cliff.” About three-quarters recommend some combination of cutting spending and increasing taxes, and the largest segment, 43.8%, urged some tax increases coupled with larger spending cuts.

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 - Hedge funds hike Smurfit Kappa positions amid takeover deal hopes, Hedge fund IBV Capital digs deep to unlock long-term value in a competitive market, Eisman of 'The Big Short' fame recommends shorting Deutsche Bank[more]

    Hedge funds hike Smurfit Kappa positions amid takeover deal hopes From Irishtimes.com: Two US hedge funds, Davidson Kempner and York Capital, have accumulated a combined 4.74 per cent interest in cardboard box maker Smurfit Kappa using financial derivatives. It comes as many investors cl

  2. Foundations of hedge fund managers gave big to controversial donor-advised funds[more]

    In the world of philanthropy and tax-deductible charitable giving, the explosion of donor-advised funds has touched off intense debate. Now, there is evidence that the DAF boom is being further fuelled by hedge fund foundation money. Four of the top five foundations that gave the most to large do

  3. Third Point to raise $400 million for SPAC, Farley to run it[more]

    From Reuters.com: Daniel Loeb's hedge fund Third Point LLC plans to raise $400 million for a "blank check" company which will be run by outgoing stock market operator NYSE Group President Thomas Farley, according to a regulatory filing made on Tuesday. The new company, referred to on Wall Stre

  4. Study: For hedge funds, smaller is better[more]

    From Institutionalinvestor.com: The smaller the hedge fund is, the better its performance is likely to be, according to a new study. The study - "Size, Age, and the Performance Life Cycle of Hedge Funds," released April 26 - sought to determine whether a hedge fund's size and age had any effect on i

  5. Hedge fund returns rose in April for first gain since January[more]

    From Bloomberg.com: Bloomberg Hedge Fund Database shows returns flat this year - Currency strategies had the biggest monthly gain at 13% Hedge fund returns increased 0.78 percent in April, reversing two consecutive monthly declines. The swing of 134 basis points was driven by gains in all seven