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Stock-picking hedge funds see first net inflows in two years in February

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Stock-picking hedge funds are finding favour with investors again for the first time in two years with equity long-short hedge funds, seeing $1.5bn in net inflows in February — the first positive inflows in 24 months — according to a report by Bloomberg.

The report cites data from Nasdaq eVestment as revealing that the equity long-short funds remain the industry largest strategy, accounting for more than a fifth of global hedge fund assets, despite seeing investors pull more than $70bn over the past two years.

While equity long-short funds have spent several years lagging index gains, particularly in 2022, hedge fund stockpickers were among the best performers in 2023 and have continued that positive performance this year, according to data compiled by Bloomberg, with Q1 returns of nearly 7%, outperforming the next best strategies — event driven and macro — which returned seen chains of around 4%.

According to Nasdaq eVestment data, the hedge fund industry overall recorded its best performance-driven gains in April 2021 in February, with long-short equity funds leading the way.

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