TrimTabs/BarclayHedge: Investors Flock to Fixed Income Hedge Funds ~ market folly

Thursday, October 11, 2012

TrimTabs/BarclayHedge: Investors Flock to Fixed Income Hedge Funds

TrimTabs and BarclayHedge just released a report that in August, hedge funds saw $5.1 billion in inflows despite the fact that many continued to lag their benchmark indices in August. 

This reverses the $9.2 billion outflow the industry saw the month prior.  Year to date, the industry has seen net redemptions of $13.2 billion.  They estimate now that hedge fund industry assets stand at around $1.7 trillion in August, a decrease of almost 29% from the peak in June 2008.

Money Flowing to Fixed Income Funds

Given many investors' propensity to invest while looking in the rearview mirror and to go where the hot performance is, it should come as no surprise that fixed income funds have attracted the most assets both on a monthly and yearly basis. 

Their research finds that, "fixed income funds significantly bested the hedge fund industry average of 1.3% for the past 12 months.  Fixed Income funds also had the best 12-month returns at 7.1% and the second best y-t-d returns at 6.2%."

Survey of Fund Managers

"The September 2012 TrimTabs/BarclayHedge Survey of Hedge Fund Managers found that sentiment was evenly divided between neutral and bullish on the performance of the S&P 500 for October.  Conducted in late September, the survey of 81 hedge fund managers also found that a majority expect Barack Obama to be re-elected and an even stronger majority expect control of Congress to remain divided."

For more on the industry, check out our other recent post on how hedge funds are handling this market.

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