Hedge funds, as measured by the Dow Jones Credit Suisse Hedge Fund Index, finished January up 2.34%; with 9 out of 10 strategies in positive territory.
In total, the industry saw estimated outflows of approximately USD15 billion in January, bringing overall assets under management for the industry to approximately USD1.72 trillion.
The Equity Market Neutral and Convertible Arbitrage sectors experienced the largest asset inflows on a percentage basis in January, with inflows of 2.27% and 0.87% from December 2011 levels, respectively.
Directional strategies, such as Long/Short Equity, experienced positive performance driven by a risky asset rally. Mean reversion was a notable trend as sectors that performed poorly for the year in 2011 performed well in January.
Tactical trading managers showed generally positive performance. Global Macro managers and Managed Futures funds posted gains as managers benefitted from macroeconomic shifts; and on the relative value front, managers showed positive performance in January. Fixed Income Arbitrage managers posted gains despite the swift change from a risk-off to a risk-on market.