The hedge fund industry redeemed USD5.1 billion (0.2 per cent of assets) in September, the largest outflow since December 2013 and only the second outflow this year, according to TrimTabs and BarclayHedge.
“Hedge fund inflows slowed sharply in the third quarter,” says Sol Waksman, president and founder of BarclayHedge. “The industry raked in USD82.1 billion in the first half of 2014 – more than in the previous three years combined — but inflows subsided to USD12.6 billion in the third quarter.”
Industry assets stood at a six-year high of USD2.38 trillion in September, according to estimates based on data from 3,490 funds. Assets climbed 18.8 per cent in the past 12 months and are down just 2.4 per cent from the all-time high of USD2.44 trillion in June 2008.
The monthly TrimTabs/BarclayHedge Hedge Fund Flow Report notes that the hedge fund industry lost 1.3 per cent in September, the worst return in 15 months, but it outperformed the S&P 500, which lost 1.4 per cent. In the past 12 months, hedge funds returned 10.3 per cent, while the S&P 500 gained 19.7 per cent.
“Macro funds performed best in September, gaining 1.2 per cent, while Distressed Securities funds had the strongest inflows at USD1.7 billion,” says Waksman. He also noted that despite superior returns in September, Macro funds have the largest redemptions year-to-date (USD6.3 billion) and in the past 12 months (USD9.8 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.
