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TrimTabs and BarclayHedge Report Hedge Funds Redeem $5.1 Billion in September but Outperform S&P 500. Inflows in Third Quarter Much Lower Than in First Half of This Year

“Hedge fund inflows slowed sharply in the third quarter,” said Sol Waksman, president and founder of BarclayHedge. “The industry raked in $82.1 billion in the first half of 2014 — more than in the previous three years combined — but inflows subsided to $12.6 billion in the third quarter.”

Industry assets stood at a six-year high of $2.38 trillion in September, according to estimates based on data from 3,490 funds. Assets climbed 18.8% in the past 12 months and are down just 2.4% from the all-time high of $2.44 trillion in June 2008.

The monthly TrimTabs/BarclayHedge Hedge Fund Flow Report noted that the hedge fund industry lost 1.3% in September, the worst return in 15 months, but it outperformed the S&P 500, which lost 1.4%. In the past 12 months, hedge funds returned 10.3%, while the S&P 500 gained 19.7%.

“Macro funds performed best in September, gaining 1.2%, while Distressed Securities funds had the strongest inflows at $1.7 billion,” said Waksman. He also noted that despite superior returns in September, Macro funds have the largest redemptions year-to-date ($6.3 billion) and in the past 12 months ($9.8 billion).

The monthly TrimTabs/BarclayHedge Survey of Hedge Fund Managers finds managers were more optimistic on stocks in October than they had been all year. A majority of respondents expects developed markets to outperform emerging and frontier markets over the next six months, a trend that has persisted for 20 consecutive months. Bullishness on gold fell to its lowest point in 17 months.

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.