FOR IMMEDIATE RELEASE
Hedge Funds Redeem $5.2 Billion in December 2011; Industry Assets Sink to Lowest Level in Nearly Two Years
Hedge Fund Managers More Bullish on S&P 500 in January 2012, According to BarclayHedge/TrimTabs Survey, But TrimTabs Demand Indicators Point to Possible Stock Market Downturn
New York, NY—February 7, 2012— BarclayHedge and TrimTabs Investment Research reported today that hedge funds redeemed an estimated $5.2 billion in December 2011 and underperformed the S&P 500 for the year. Industry assets fell to $1.64 trillion, down 7.7% for 2011, and hit their lowest level since February 2010.
“The Barclay Hedge Fund Index fell 0.4% in December after decreasing 1.4% in November,” says Sol Waksman, founder and President of BarclayHedge. “From May 2011 onward, hedge fund performance was negative in every month except October.”
“Hedge funds underperformed the S&P 500 last year, falling 5.5% compared to a flat return for the S&P 500,” says Leon Mirochnik, an analyst at TrimTabs. In December, only three of 14 major hedge fund categories tracked by TrimTabs and BarclayHedge — Equity Market Neutral, Merger Arbitrage and Fixed Income — showed positive returns.
Meanwhile, the latest TrimTabs/BarclayHedge Survey of Hedge Fund Managers reveals growing numbers of fund managers are becoming more optimistic about the prospects of U.S. equities. The survey of 108 hedge fund managers found bullish sentiment on the S&P 500 at 45.4% in January 2012, up from 42% in December and the second-highest reading since December 2010. Managers were surveyed in the third week of January.
While hedge fund managers are seeing brighter days ahead, the TrimTabs Demand Index is far less optimistic. "The Demand Index is down more than 50% since the beginning of January, which stands as a warning to bullish market participants,” Mirochnik says. The Demand Index, which monitors 21 key sentiment indicators to time U.S. equities, signaled a strong bullish stance in late November, just before the markets surged. “This sudden reversal in January is cause for caution,” Mirochnik says.
The TrimTabs/BarclayHedge database tracks hedge fund flows on a monthly basis. The TrimTabs/BarclayHedge Hedge Fund Flow Report provides detailed analysis of these flows as well as relevant topical studies. Click here for further information.
BarclayHedge is a leading hedge fund data vendor and one of the foremost sources for proprietary research in the field of alternative investments. From its origin as a research specialist and performance measurement firm, BarclayHedge has developed complete client services as a publisher, database and software provider, and industry consultant.
TrimTabs Investment Research is the only independent research service that publishes detailed daily coverage of U.S. stock market liquidity--including mutual fund flows and exchange-traded fund flows--as well as weekly withheld income and employment tax collections. Founded by Charles Biderman, TrimTabs has provided institutional investors with trading strategies since 1990. For more information, please visit us here.