“January bucked the trend,” said Sol Waksman, CEO of BarclayHedge. “The first month of the year typically delivers a redemption-driven outflow. The fact that hedge funds managed to attract money is a good sign.”
Distressed Securities funds posted the biggest inflow (6.2% of assets) and the best return (1.8%) in January. Multi Strategy funds posted the biggest outflow, while Equity Long Only funds showed the worst return. Funds of Hedge Funds posted an outflow of $12.6 billion, the seventeenth outflow in 19 months.
“Funds of Funds have performed poorly,” said Vincent Deluard, Global Equity Strategist at TrimTabs. “They returned only 12.3% in the past year, less than half of the industry’s average 25.9% gain. That investors are walking away does not surprise.”
Merger Arbitrage funds posted the biggest inflow in the past year, while Multi Strategy funds posted the biggest outflow. Equity Market Neutral funds returned 1.6%, the worst performance of any strategy. Emerging Markets funds performed the best, returning 65.7%.
“The industry has recovered from the late 2008 sell-off in spectacular fashion,” Deluard said. “While the S&P 500 sits 30.6% below its October 2007 peak, hedge fund performance stands within three percentage points of its May 2008 record high. More money is almost certainly on the way.”
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.