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Hedge Funds add $18.4 billion in August but underperform S&P 500

Tuesday, October 07, 2014
Opalesque Industry Update - BarclayHedge and TrimTabs Investment Research reported today that the hedge fund industry took in $18.4 billion (0.8% of assets) in August, the highest inflow in three months and a strong rebound from redemptions of $750 million (0.03% of assets) in July.

“Hedge fund inflows this year are the strongest we’ve seen since the financial crisis,” said Sol Waksman, president and founder of BarclayHedge. “The industry took in $99.0 billion in the first eight months of 2014, more than double the inflow of $47.5 billion in the same period last year.”

Industry assets rose to a six-year high of $2.38 trillion in August, according to estimates based on data from 3,485 funds. Assets climbed 19.5% in the past 12 months and are down just 2.6% from the all-time high of $2.44 trillion in June 2008. The monthly TrimTabs/BarclayHedge Hedge Fund Flow Report noted that the Barclay Hedge Fund Index gained 1.2% in August, underperforming the S&P 500, which gained 3.8% for the month. In the past 12 months, the Barclay Hedge Fund Index returned 10.3%, while the S&P 500 gained 25.2%.

“Sector Specific funds delivered the best returns in August, gaining 2.6%, while Multi-Strategy funds had the strongest inflows at $4.4 billion,” said Waksman. He also noted that investors are shunning Macro funds, which have had the most redemptions year to date ($4.3 billion) and in the past 12 months ($9.8 billion).

The monthly TrimTabs/BarclayHedge Survey of Hedge Fund Managers finds no consensus on U.S. stocks: 37.4% of respondents in September’s survey were neutral on the S&P 500 over the next 30 days, 32.3% were bullish, and 30.3% were bearish. Optimism on the U.S. Dollar Index rose to an all-time high, while pessimism on 10-year Treasury notes more than doubled. Managers also turned more bearish on gold and oil prices.

BarclayHedge

Press Release

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