Despite the January inflows, the industry shed $12.6 billion in the past 12-months, a sharp turnaround from the previous 12-month span when it took in $30.1 billion according to the TrimTabs/BarclayHedge Hedge Fund Flow Report.
The industry as a whole also underperformed in January, gaining only 2.5%, compared with 5% for the S&P 500, continuing a longer-term trend. During the past 12 months the industry earned 7.8%, trailing the S&P 500's 14% advance.
“Although assets have been flowing out of hedge funds and equity mutual funds, now that the fear of a major tail-risk event destabilizing Western economies has subsided, we’re starting to see assets flowing back,” said Sol Waksman, founder and president of BarclayHedge, pointing to the longer term flow trends.
The report noted, however, that in terms of performance, stock-picking hedge fund managers did considerably better than the industry in January and over the longer term. Equity Long Only hedge funds earned 5.7% in January and 15% in the past 12 months, the best returns in both time horizons among the 13 major fund categories. Meanwhile, funds of hedge funds continued to shed assets in January, giving up $6.4 billion, bringing their outflows in the past 12 months to $45.2 billion.
“It’s not surprising that funds of funds are posting big outflows,” said a Vice President at TrimTabs. “They underperformed the hedge fund industry by 53 basis points in January and 303 basis points in the past 12 months."
The latest TrimTabs/BarclayHedge Survey of Hedge Fund Managers found managers were notably less optimistic on the S&P 500 in February than they were at the same time in January. Bullish sentiment toward the S&P 500 fell nearly 11 percentage points from January, while bearish sentiment rose over 13 points.
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.