“September was a good month for hedge fund managers,” said Sol Waksman, founder and President of BarclayHedge. “Nine in 10 managers reported a profit for the month, and our Hedge Fund Index increased 3.5%. This is the largest gain since May 2009, and it lifted the index above the October 2007 high-water mark.”
Hedge fund investors were risk averse in September. Equity Long Only funds redeemed $829 million (1.2% of assets), the heaviest outflow of all fund strategies, while Emerging Markets funds redeemed $269 million (0.1% of assets), the third outflow in four months. Meanwhile, commodity trading advisors (CTAs) hauled in $5.8 billion, the sixth straight inflow as well as the fourteenth in 16 months. In contrast, Funds of Hedge Funds redeemed $635 million (0.1% of assets).
“It won’t surprise us to see hedge fund managers investing aggressively through year-end, which could keep a strong bid under stock prices,” said Vincent Deluard, Executive Vice President at TrimTabs. “Investors have poured $16.1 billion into hedge funds in the past three months, and managers need to put that fresh cash to work. Also, more than half of managers have failed to poke through their previous high-water marks. In order for these folks to collect performance fees this year, they need to lever up and produce a blockbuster quarter.”
Hedge fund investors continue to pour into debt. Fixed Income hedge funds posted an inflow of $1.3 billion (0.7% of assets) in August, the fifth straight inflow. Fixed Income funds boast a year-to-date return of 9.6%, far and away the best performance of any hedge fund strategy.
“Fat fixed-income inflows could persist for months even though bond ETFs and mutual funds have sucked in a staggering $710 billion since the start of 2009,” noted Deluard. “The Fed just announced it will load up on Treasuries to the tune of $900 billion through Q2 2011, and it’s a rare treat for investors to be able to piggyback a Fed trade policymakers are telegraphing so clearly.”
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.