The hedge fund industry posted an estimated inflow of USD16.6bn, or 1.1 per cent of assets, in February 2010, according to TrimTabs Investment Research and BarclayHedge. 

Hedge funds showed a positive return in each of the past 12 months, and industry assets stand at a 16-month high of USD1.5trn.

“Hedge funds sport a stellar win streak, and the average fund outperformed the S&P 500 last year,” says Sol Waksman, founder and president of BarclayHedge.  “Money is chasing performance.”

Distressed securities funds posted the biggest inflow (4.2 per cent of assets) in February. 

Emerging markets funds lost money (0.1 per cent of assets) for a second straight month, despite returning 65.6 per cent in the past year. 

Funds of hedge funds continued to perform poorly.

“Funds of funds have underperformed the industry by a fat 13.9 per cent in the past year,” says Vincent Deluard, global equity strategist at TrimTabs. “And as a consequence, they continue to bleed assets - USD17.4bn in the past three months.”

By country, Canadian and Chinese funds performed the best in the past decade, while funds in Japan and Switzerland performed the worst. Britain boasts the best returns for emerging markets funds.

“The US portion of the industry sank to 60 per cent in the past ten years,” Deluard adds. “We’re losing market share. The hedge fund industry has gone global.”


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