Charles Biderman Opalesque Industry Update - BarclayHedge and TrimTabs Investment Research reported today that the hedge fund industry redeemed $5.1 billion (0.3% of assets) in April, reversing a $2.8 billion inflow in March. Based on data from 3,042 funds, the April TrimTabs/BarclayHedge Hedge Fund Flow Report estimated that industry assets stood at $1.7 trillion in April, up 1.6% for the first four months of 2012.
TrimTabs and BarclayHedge reported that more than $12.7 billion flowed out of the hedge fund industry between May 2011 and April 2012. There were net outflows in six of the 12 months. Thats a sharp contrast from the previous 12 months, when the industry saw a net inflow of $90.7 billion and just three monthly outflows, said Sol Waksman, founder and president of BarclayHedge.
Hedge funds lost 0.59% in April, besting the S&P 500s April loss of 0.75%, but the industry trailed the popular financial industry benchmark for the first four months of 2012, returning 5.0% vs. a 11.2% gain for S&P 500, TrimTabs and BarclayHedge reported. Aprils results marked the first time in six months that the industry outperformed the S&P 500, Waksman said.
Over the past 12 months, Fixed Income, Multi-Strategy and Macro funds represented the most popular strategies of hedge fund investors, attracting the largest cash inflows among 13 fund categories tracked by TrimTabs and BarclayHedge. With interest rates near zero and central bankers flooding the markets with liquidity, Fixed-Income investors are chasing any yield they can get, said Charles Biderman, founder and CEO of TrimTabs. Emerging Market and Equity Long Bias funds posted the highest outflows over the same time period.
Meanwhile, the May 2012 TrimTabs/BarclayHedge Survey of Hedge Fund Managers found that 35.6% of managers were bearish on the S&P 500 for June, while 30.5% were bullish, and 33.9% were neutral. Conducted in late May, the survey of 120 hedge fund managers found bearishness on the S&P 500 at a six-month high and bullishness at an eight-month low.
In the survey, bullish sentiment on the U.S. Dollar Index surged to 61.9% in May from 35.4 in April, a 15-month high. Managers are responding to seemingly never-ending anxiety over Eurozone sovereign debt, which is punishing the euro and bolstering demand for the greenback, said Leon Mirochnik, a financial analyst at TrimTabs.
When asked about the likelihood of the Federal Reserve launching another round of quantitative easing this year, over 28% of managers saw more than a 60% chance of that happening, while over 47% of managers saw less than a 40% likelihood.